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Intel to Buy Imagination Technologies or AMD’s RTG?

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This week started with a milestone announcement of Japanese SoftBank moving in to acquire ARM Holdings for a record $32 billion. Many analysts lamented that the takeover was a result of Brexit, even though everyone in their right minds should know that negotiations of this magnitude take years and typically are made in complete silence for 6-18 months (due dilligence and all that jazz).

However, this might not be the only acquisition in the modest pool of British semiconductor players. As we reported on multiple occasions, Intel is reorganizing, i.e. restructuring the company. As a part of that reorganization, the company performed no less than three rounds of layoffs, with over 12,000 people being removed from the company. According to conversations with the recently departed and people still with the company, no department got as culled as the Intel’s mobile processor and Graphics department (IGP), with Intel focusing the culling to its aging staff – as reported on Oregon Live, if you were above 40 years of age, your chances of being laid off were 2.5 times higher than if you were under 40, a trend also known as ageism.

This cull was part of Brian Krzanich’s drive to build talent inside the company by acquisition. Expanding the licensing agreements isn’t something which Intel would like to do, but the company does not want to bleed out significant amount of cash having paid through the nose for Altera. Paying $16.7 billion for a company that doesn’t break $2 billion in annual revenue (yet alone net income) means a long pay back cycle. However, the product cycle does not stop, no matter how you slow it down.

Intel Skylake Die shows just how much percentage is dedicated to the GPU

Thus, 2018/19 10nm Ice Lake processors do not have a GPU at the moment. They can use the Cannonlake design, but the question is will that be enough as the graphics now occupy more than 50% of processor die, making Intel CPUs… APUs (Accelerated Processing Unit). Or HPUs (Hybrid Processing Unit). The picture above shows Skylake die and the percentage off it dedicated for the GPU. If you look at picture below, which shows same Skylake-R processor with embeddd 128MB of memory, that percentage changes to over 60% of the total on-package die dedicated to accelerating graphics.

Intel Skylake-R i.e. Core i7-6770Q or Xeon E5 Series

In 2017, the cross-licensing agreement between Nvidia and Intel will expire. Contrary to the popular belief, Intel has no other choice but to continue the cross-licensing agreement with Nvidia, since Intel does not use GeForce hardware in its line-up, but was rather found to infringe on Nvidia’s patents. This was solved with a $1.5 billion settlement which instituted in $50 million-per-quarter payments which will end on January 31st, 2018.

Intel’s cross-licensing agreement with AMD is safe for another four years (April 1, 2010 to March 31st, 2020), but that deal does not include integration of Radeon or FirePro IP.

The NVIDIA – Intel Deal

First Intel – Nvidia deal happened in 2000, when Intel gave the best offer to Microsoft and won the deal for the first Xbox console. Nvidia made its AMD-based nForce chipset to run on Intel, and both companies signed an agreement. In 2004, both companies went back to the negotiating table as Intel wanted to integrate Nvidia’s IP inside Larrabee and future integrated processor graphics, while Nvidia wanted to build chipsets for Intel processors. We know the rest of the story – Intel walked out after nForce started to sell like hotcakes (claiming QPI bus was not the part of the agreement), Nvidia went to the court and ultimately settled for a nice cash prize. While we do not have access to the current agreement, multiple conversations with Nvidia executives claimed that Intel cannot integrate GeForce into its lineup – without a new contract which would probably yield $10-15 fee per every “Intel CPU with GeForce” made.

Over the next 12 months, the companies will have to decide what to do – extend the original 2004/2011 deal or expand the deal to include licensing the GeForce (Core) and potentially Quadro IP (Xeon E5).

The AMD – Intel Deal

AMD and Intel have a cross-licensing deal which was originally created by IBM in order to allow for second-source of x86 processors. First AMD processors were indeed clones of Intel’s own 286 and 386 architecture, but that started to change as AMD ultimately ended in the lead after bringing Jim Keller, Fred Weber & Dirk Meyer – AMD K7 was the answer to the expiry of cross-licensing deal in 2000, and the K7 ultimately killed off the CISC architecture, which was the base for Intel’s x86. Today, both companies make x86 RISC processors, and Intel was even forced to adopt AMD’s x86-64, 64-bit architecture which is now present in almost every processor Intel makes.

Back in August 2005, AMD moved to acquire ATI after a fallout between Hector J. Ruiz and Jen-Hsun Huang over who would lead the new AMD, a result of SNAP (Strategic NVIDIA AMD Partnership) becoming a takeover bid for Nvidia. You can read more in my old analysis on Tom’s Hardware.

More recently, AMD spun off its engineering teams under the Radeon Technologies Group, which is lead by Raja Koduri. By focusing and bringing new and returning the old talents into the fold, RTG is now a non-incorporated company inside AMD holding that is building new products for AMD, Microsoft, Nintendo, Samsung, Sony and potentially, for Intel. That disclosure was a part of big blow out between RTG and HardOCP, or to be more precise – between Raja Koduri and Kyle Bennett. If we disregard the inflammatory tone of the article, there is a momentum between AMD/RTG and Intel at the moment.

In real world, chances that RTG would license anything but baseline Radeon and FirePro at a premium price – are close to zero. That is, unless ZEN-based products tank on the market – which is something that won’t happen (according to the initial leaked performance figures).

Acquiring Imagination Technologies

This brings us to the most probable solution for Intel’s conundrum. Imagination Technologies is a company close to Intel, and the Santa Clara giant already owned a 5% stake in the company. Imagination Technologies tried to sell themselves to Apple, who owns 8.5% of the company, while Tsinghua Unigroup International owns another 3%. Imagination is listed on London Stock Exchange, and carries a modest 595 million pound market cap i.e. under 800 million US dollars.

Intel already has an cross-licensing agreement with Imagination, and more importantly, uses Imagination PowerVR-based GPUs in some of its processors (read: low-power Atom and smartphone chips). Most importantly, besides its graphics IP, Imagination Technologies also owns Caustic Graphics, real-time ray-tracing technology firm with their own silicon, as well as MIPS processor architecture.

Acquiring the company could happen for approximately $1.0-1.5 billion range, which is a fairly cheap acquisition, which more importantly would give Intel access to Apple, who uses PowerVR SGX graphics in all of its products. There are also several silicon vendors from Far East who exclusively use PowerVR SGX and let’s not forget Apple’s largest competitor, Samsung – who switches between PowerVR and Mali (owned by ARM) GPUs.

The question is – who will power the upcoming Intel processors once the time Cannonlake / Ice Lake passes. And unless your name is Brian Krzanich, your guess is as good as mine.

  • CPUsAreHistory

    The answer is simple. Intel will really want to get the AMD APU/GPU IP..

    Why? AMD has the only native APU architecture in the world, After several years of hard work, AMD was able (in Zen) to integrate the graphics cores into the same processor (hybrid processor), which allows the OS to independently schedule cpu or gpu cores and access the same paged memory, etc..

    Intel and all other manufacturers only place the gpu and cpu processors in the same silicon chip, but they are not integrated into the same processor as AMD do, which means AMD chips are a lot cheaper to produce and a lot more efficient. Intel has to charge a lot of money to put high-end materials and components into their chips in order to squeeze performance, which makes their chips a lot more expensive.

    If Intel uses its technology in the AMD APU’s and builds higher-end APU chips, then you will not need GPU’s in super-computers since the enhanced sp/dp APU’s will just blast away any computation/processing/graphics problem and can be packed very tightly/densely in any system.

    No need to have the CPU be the master of the GPU, no need to have the CPU transfer information to the GPU and then back, etc.. etc..

    AMD figured out how to create a fully functional native HSA/hUMA APU hybrid processor, that is gold for APPLE, Microsoft, and/or anyother customers.. Only a company with high-end GPU Intellectual property like NVIDIA and ATI could do that.

    Though, NVIDIA is just a high-end GPU company so they don’t have the high-end CPU intellectual property to pull that marvel. Intel is just a CPu company so again, they cannot pull that one. Only AMD after it bought ATI could pull that complex architectural effort, which took a lot more years than they originally thought..

    If Intel buys AMD, it will immediately secure its future for many years and will put a stop to AMD development of high-end 64-bit AMD ARM processors, which is an Ax hanging on top of Intel’s neck.. One miscalculation and Intel is gone because it does not have high end GPU’s, it has been punished for acting unethically with AMD and NVIDIA, and AMD is years ahead in this architecture than Intel, NVIDIA, Qualcom, Samsung, etc.

    • >savt

      the US supreme court would block Intel from buying AMD or any part of AMD (graphics and processors included) as it would fall under the category of a monopoly

      • CPUsAreHistory

        Not really, now all the CPU companies have to include high-end GPU’s in their processors or they will soon be dinosaurs.. AMD bought ATI.. no problem.. Qualcom does CPU and GPUs.. no problem.. Samsung does CPU and GPU’s ,, no problem.. APPLE has their own GPU’s and use ARM cpus.. Intel is a dinsosaur that buys the GPu from a small company that cannot compete with AMD and NVIDIA..

        • >savt

          the problem is that Samsung, Qualcom, Apple (and so on) have nowhere near the market share of Intel in the primary market Intel is in, also all ARM licenses (sans AMD) use Mali graphics, which is an ARM design. The biggest advantage AMD has over Intel is their integrated graphics to the point that this is the biggest reason why somebody would by an AMD APU

          • There are numerous cases where ARM licensees use 3rd party graphics IP. Or 1st party, if you look at even some of the recent Qualcomm Snapdragons, which combine vanilla Cortex cores with Adreno graphics…. or Samsung Exynos 5 a few years back. Let’s not talk about Huawei / HiSilicon, MediaTek etc…

          • Coolington

            I give credit to Qualcomm naming their core Adreno, which is basically just Radeon ;), at least they give credit where this magnificent core came from.

    • Ken Luskin

      @CPU , Its true that AMD has better integrated graphics than Intel.

      But, ZEN is a CPU architecture! I have no idea how you dreamed up your statements about ZEN…but they are blatantly false.

      ZEN might have better abilities to communicate with Radeon GPUs, but that does NOT meant that the GPU is a part of ZEN.

      AMD has an advantage with the architecture of their APUs, but that does NOT mean the GPU is part of ZEN.

      If you have a link to source for your statements, please provide it….OK?

      BTW, the first implementation of ZEN is in a CPU only chip for both desktop and servers.

      • CPUsAreHistory

        You are not familiar with the Zen architecture. Zen is a CPU AND an APU architecture. The first batch of Zen CPU may be released at the end of this year and the Zen APU, with Greenland graphics cores, at the beginning of next year. Links, its all over the internet and have been for months if not years.. Just search for Zen APU and you’ll get hundreds of hits with a lot of good information…

        • Ken Luskin

          ZEN refers to the CPU cores! ZEN is NOT an APU architecture!

          AMD’s APU architecture already exists.

          Of course ZEN cores will be used in AMD APUs.

          But, does NOT mean that AMD completely changed their APU architecture.

          There has been ZERO mention of AMD changing the architecture of its APUs.

          = YOU are CLUELESS!

        • BaronMatrix

          You may mean an SOC meaning it has the south Bridge to share the same socket…

  • Ken Luskin

    Theo, 1) AMD cross license with Intel EXPIRED Nov. 2014
    2) Intel license from Nvidia is for patents, and does NOT provide access to key code/Algos, etc.

    3) So, Intel could license AMD’s Radeon patents, without getting access to how to employ them.

    Reasons why Intel should be more interested in Radeon patents:

    1) HBM! High Bandwidth Memory has been adopted by JEDEC as an industry standard in October 2013
    While Intel is using its own proprietary HMC, HBM appears to have an advantage. HBM solves the bandwidth bottleneck in APUs.

    2) Intel is using AMD’s Freesync technology, rather than Nvidia G-Sync.

    3) AMD GNC architecture has on advantage for DX12 and VR over Nvidia architecture.

    4) MSFT, Sony, and Nintendo are working closely with Radeon and NOT Nvidia for the architecture of their game consoles.

    Imagination tech has weak GPU IP…not even close to what AMD & NVDA have, and what Intel needs.

    So, IF Intel thinks they need patent protection, they would be better off licensing from AMD….

    • >savt

      however, Freesync/adaptive sync is an open standard and the later naming is used in Intel iGPU’s

      • Ken Luskin

        The fact that Freesync is open standard means that Intel has less interest in Nvidia’s proprietary patents.

    • AMD has an active 10-year renewable cross-licensing agreement without which it could not manufacture x86 processors. Neither could Intel sell a single x86-64 i.e. EM64T processor (unless we’re talking Itanium).

      • Ken Luskin

        https://www.sec.gov/Archives/edgar/data/2488/000119312509236705/dex102.htm
        PATENT CROSS LICENSE AGREEMENT
        BETWEEN
        ADVANCED MICRO DEVICES, INC. AND INTEL CORPORATION
        This Patent Cross License Agreement (“Agreement”) is entered into as of November 11, 2009 (“Effective Date”) by and between Advanced Micro Devices, Inc. a Delaware corporation, having an office at One AMD Place, Sunnyvale, California 94085 (“AMD”) and Intel Corporation,

        1.11 “Capture Period” shall mean any time on or prior to the earlier of (a) the fifth anniversary of the Effective Date and (b) a Change of Control of either Party.

        4. PRIOR LICENSE

        4.1 This Agreement supersedes the patent cross license agreements made by the Parties and effective on January 1, 2001, January 1, 1996 (as amended), and September 21, 1976 (as amended) (collectively, the “Prior Agreements”), and the rights and licenses of each Licensed Party under, or with respect to, the Patents of the other Party and its Subsidiaries shall be governed by this Agreement beginning with the Effective Date.

        5.1 Term. This Agreement and the rights and licenses granted under this Agreement shall become effective on the Effective Date, and shall continue in effect until the expiration of the last to expire of the Patents, unless earlier terminated by a Party pursuant to Section 5.2

        ================================
        http://wccftech.com/intel-talks-cross-licensing-amd-gpu-ip/

        THEO, If you bother to talk to either AMD or Intel, and READ the above Cross license deal, you will realize that any patents filed after Nov. 11, 2014 are NOT bound to a cross license agreement.

        The Nov. 2009 cross license was a 5 year deal, but any patents filed before Nov. 2014 will continue to be licensed until their expiration, “unless earlier terminated by a party persuant to Section 5.2

        NOT only are you wrong about the term of the cross license deal, there is NO way that AMD would agree to sell Radeon, and there is NO way such a deal be approved by the U.S. Govt.

        So, your article is nothing more than click bait!

        Congrats I not only clicked on it, but I have wasted my time dealing with UNeducated people like you!

  • >savt

    there is a fundamental issue with this column, AMD didn’t spin off their graphics division. Radeon Technology Group is in every sense of the word, is a part of AMD, all AMD did was reorganize internally giving their graphics division more independence, it is not a separate company.

    • Ken Luskin

      I agree, the title of this article is blatant click bait….. its sad that the author does NOT realize that : 1) Radeon is key to AMD’s APUs, which are the future.
      2) NO way that Intel would be allowed by Justice Dept/FTC to buy AMD

      • Google back how many things I wrote which people said cannot be true at the time… AMD-Nvidia, MAD AMD i.e. Asset Lite i.e. GlobalFoundries-AMD deal, Dell-AMD deal, IBM-Newisys-AMD deal etc… And Ken, Intel could buy AMD. But they will not do that, as they need a 2nd source – the moment x86 would go single-supplier, it would be pushed out of the market, regardless of how big it is.

        • Goldminer

          China-AMD that would be the fox in the hen house.

        • Ken Luskin

          If you throw enough SHIT against the wall a small turd or 2 will stick…. you are clueless!

          AMD’s entire business model is built on APUs!

          FUCKING MORON!

      • Goldminer

        He would like to think that RTG can be separated from AMD because the writing is on the wall for Intel IF Zen-Apu’s perform as designed.

    • I’ll just grab the popcorn…

  • Ashley Gann

    Throwing AMD/RTG in there is, as noted by others, pure clickbait. That said, buying Imagination Technologies in the current climate makes as much or more sense than simply licensing for intel. We’ll see if a chinese company doesn’t beat them to it…
    https://www.theguardian.com/business/marketforceslive/2016/may/09/imagination-technologies-jumps-13-as-chinese-firm-takes-3-stake

  • H23

    RTG is not an independent private company in AMD. There is no Zen benchmarks. And everything else is wrong as well.

    • “Non-incorporated”… it’s a business unit ready for a spin-off, with parallel management structure.

      • BaronMatrix

        A spin-off would add complexity to APU design and manuf…

  • John doe

    If the statements on IMG are any reflection, this article was poorly researched.

    1) Intel doesn’t own any IMG shares, they sold them quite some time ago.
    2) “caustic graphics” no longer exists as an entity, the ray tracing IP as modified to be suitable for inclusion into SOCs. It currently has no licencees.
    3) Apple haven’t used SGX graphics in their “A” processors for several years. They have long switched to IMG’s rogue arch series 6,7 and 8.
    4) Tsinghua Unigroup sold some IMG shares recently, and no longer have a notifible holding.
    5) Intel has a licensing agreement with IMG, NOT a cross-licensing agreement, IMG does not have any rights to use Intel IP.

    • Alienation

      That ”SGX” (PowerVR) belongs to IMG (Imagination).

      • John doe

        Who said it didn’t belong to img? The article stated that Apple uses SGX graphics in all its iOS products. The fact is SGX hasn’t been used for several years in any new Apple designs. Img launched its rogue line of graphics some years ago, which is an entirely different family fro SGX, and apple have been using rogue in recent years.

  • Ken Luskin
    • rogue1

      Still spammin yer delusions all over the net?

  • Ken Luskin
    • rogue1

      AMD’s still hangin by a thin thread off a cliff edge……. Its runnin out of stuff to sell for cash…… Tis why it wants to monetize its IPs………

  • Ken Luskin
    • rogue1

      More delusions…… What happened to your Zen in Q1 2016 prediction?

  • Alienation

    RTG Intel deal looks unlikely unless AMD is really desperate. If ever NVIDIA and Intel becomes one then unstoppable.

    • BaronMatrix

      There are two reasons why this has a good chance of happening… AMD created external graphics but it uses Thnderbolt… AMD could allow Intel to brand RX470 or 460 for NUCs while AMD could get TB ports for Zen APUs in SFFs…

  • Busybee

    Intel buying AMD’s RTG? That would create quite a sensation. Still, looks like a click bait article…

  • Anereh

    Immagine that we could have 3 players in GPUs again. Just because AMD sells RTG dosen’t mean they exit the GPU market. They sold off parts of ATI after the purchase they could do the same again while keeping hold of there pattents. Obviouslly the 2 comapnies that brought parts of ATI were given access to the pattents necessary to spin products.

  • Ken_Masters

    wait . . . assuming Imagination Tech even has semi decent GPU capabilities . . . Wouldn’t they have needed to acquire them about a year or two ago if they want to be able to successfully integrate their GPU onto their chips? Their deal with Nvidia expires in about a year yea? Integrating GPUs onto a CPU doesn’t happen overnight.

    is there something i am missing?

  • noasynvidia

    this is really depends on how much intel
    want pay. RTG will not sell cheap anyway.