Outspoken Oracle chief executive Larry Ellison has added further fuel to speculation he started last month, by refusing to rule out that he’s in the market to buy a chipmaker.
Ellison first said that he wouldn’t rule out buying a chip manufacturer to analysts in late September.
Yesterday, he refused to back down from the comment when questioned further about any potential acquisition plans by analysts during Oracle’s annual shareholder meeting.
"My point really was that we are interested in buying IP of all kinds," he said, adding that he recognised the IP [intellectual property] value of a semiconductor. "So...we would be interested in certain kinds of semiconductor companies."
Having stirred initial rumours that, in that case, Oracle may be looking to buy Intel rival AMD, yesterday’s further comments from Ellison forced AMD’s chief executive to respond.
"AMD is not for sale, but we are happy to listen to any proposal which is in the interest to our shareholders," AMD chief executive Dirk Meyer told an industry conference in Barcelona earlier today.
“That’s all he could say for legal reasons,” pointed out Tony Lock, programme director at analyst firm Freeform Dynamics.
“As to Oracle’s plans, what it might do [as regards buying a chipmaker] all depends on where Ellison wants to take the company. Chip fabrication is a high-volume, low-margin business. So, it depends on whether he thinks he can get the volume,” he said.
Lock thought the idea of acquiring the IP of the likes of an AMD made more sense. But again, he pointed out that Oracle acquired the UltraSparc design IP when it bought Sun.
Bob Tarzey, director at analyst firm Quocirca, also pointed to the potential overlap with Sun IP.
“Well it would complete his stack, although with Sun he does have Sparc, which must be considered approaching legacy by now,” he said.
Tarzey added: “I have not heard his comments, but he could reflect on the fact that the world’s biggest chipmaker is diversifying away from its core business – Intel has recently purchased Infineon and McAfee to this end.
"Thinking of the latter, it may use some McAfee assets to embed security in silicon, but McAfee has so much more than this. The conclusion has to be that Intel wants more high-margin business lines, unless they are specialised chips, which are very much a commodity."
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