Widespread talk of an IBM-Advanced Micro Devices merger, credited for giving AMD's share price an upward kick of nearly 11 percent for a few hours Wednesday, is nothing but speculation run amok, a source close to AMD said Thursday.
"A deal could see IBM's microelectronics division merge with AMD at some point, possibly in the near term," reported Mergemarket's David Zielenziger in the online version of the Financial Times Wednesday.
But the M&A rumor mill often churns out scenarios involving Sunnyvale, Calif.-based AMD, many citing Armonk, N.Y.-based IBM as a possible buyer, the source said. In this case, the source wondered whether published speculation by a financial analyst might have been misinterpreted and then passed on as fact by the "industry sources" cited by Zielenziger.
Interestingly, though in no way confirmed as relevant to the AMD-IBM rumors, in 2004 the chipmaker and the computing giant extended a resource-sharing contract to jointly develop 65nm and 45nm process technologies, among other R&D arrangements. That contract extension called for AMD to pay IBM between $250 million and $280 million, and it's up at the end of this year.