IBM-AMD Merger Rumors Have Markets Abuzz

"A deal could see IBM's microelectronics division merge with AMD at some point, possibly in the near term," reported David Zielenziger in the Financial Times Wednesday afternoon, citing unnamed "industry sources."

AMD's financially disastrous year has sparked no shortage of speculation about its future in recent months. But until yesterday's report by Zielenziger, few such exercises contained actual names and details.

Sunnyvale, Calif.-based AMD lost a total of $3.38 billion, or $6.06 per share, across the board in 2007, although much of that was in costs associated with AMD's 2006 acquisition of graphics maker ATI.

A $622 million cash infusion from an Abu Dhabi investment firm late last year gave AMD some breathing room. But analysts believe the company may have just a year to five quarters to return to the black -- not much of a window at all in the capital-intensive semiconductor industry.