Intel To License AMD GPU Patents?; Possible Impact on AMD and Nvidia

As per a recent report attributed to Bloomberg, Intel (NASDAQ:INTC) is apparently in talks with AMD (NYSE:AMD) to license the latter’s GPU patents. ^[1] Intel’s cross-licensing deal with Nvidia (NASDAQ:NVDA), which allows Intel to use Nvidia’s IP in the GPUs integrated with its CPUs, expires in Q1 2017. How is this expected to impact Nvidia & AMD?

>> Nvidia derives <5% of its revenue from the licensing deal, so the loss of revenue will not have much on an impact on its topline

>> If Intel uses AMD GPUs for the mGPU market, it could intensify competition for Nvidia and impact GPU revenue growth

>> AMD’s GPU revenue has declined by >35% between 2012-2015 due to market share loss to Nvidia

>> The licensing deal with Intel will pump in the much needed cash, and help get the division back to profitability.

Possible Drawback – Nvidia has no x86 CPU+GPU SoC chips, so the deal was a win-win for both companies. Intel could become a direct competition for AMD APUs.

Read more about AMD and Nvidia:

>> Nvidia’s Revenue & EBITDA Grow In The Next 5 Years: Trefis Estimate

>> How Has Nvidia’s Revenue And EBITDA Composition Changed Between 2010 & 2015?

>> How Is Nvidia’s Revenue & EBITDA Composition Expected To Change By 2020?

>> What’s AMD’s Fundamental Value Based On Expected 2016 Results?

>> Where is AMD’s 2016 Revenue Growth Expected To Come From?

>> What Happens To AMD’s Valuation If Embedded & Semicustom Revenue Declines To $2 Billion In 2016?

>> AMD: The Year 2015 In Review

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1. Bloomberg: Intel in talks with AMD to license GPU patents, Seeking Alpha, March 16, 2016 [↩]