Intel Unlikely Suitor For Nvidia, Analysts Say

Though speculation of an nVidia acquisition by Intel has been circulating since the AMD ATI merger, such a deal may not provide sufficient financial incentive. No matter how beneficial technically, financial analyst are questioning the rumors from a business sense, and it may be that nVidia will be acquired by other interested parties.

Intel Corp. is an unlikely suitor for chip maker Nvidia Corp., analysts said Thursday, although a source familiar with the situation noted takeover interest in Nvidia from various players in its sector. Nvidia shares climbed more than 8 percent on Wednesday on speculation that the graphics chipmaker could be acquired by Intel, traders said. Analysts, however, doubted whether such a deal would ever occur.

nVidia has more to gain than Intel in the event of a merger. nVidia would gain support and access to the smaller technology nodes Intel has developed, namely 65nm and 45nm. There would certainly be some cross pollination of design practices as well, of which Intel is clearly world class. Perhaps the most compelling reason for Intel is access to nVidia's Northbridge designs, since both compete in this area and nVidia seems to have the edge. All of these benefits would take some time to mature, but if the financial incentives are not there, it looks like this will never happen.

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