IBM-AMD Merger Rumors Have Markets Abuzz

Advanced Micro Devices has "no comment" on a Financial Times report that the chipmaker will soon form a "deeper partnership" with IBM, or even an outright merger with the computing giant. But that didn't stop AMD stock from gaining 73 cents to $7.56, or 10.7 percent, in Wednesday afternoon trading on the heels of the news. <P> "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." <P> 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. <P> 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. <P> 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.

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