Advanced Micro Devices (Nasdaq: AMD) has fallen on hard times. Weak earnings reports and butter-fingered management moves hit the stock hard in recent quarters, and share prices have fallen to three-year lows, some 20% below where they started in January. In short, larger rival Intel (Nasdaq: INTC) is eating AMD's lunch.

But, on Wednesday, an unseen hand suddenly straightened up AMD's sagging chart. Share prices jumped as much as 11% on some noise from the rumor mill. As it turns out, the hand stretched all the way from South Korea.

Somewhere around noon on Wednesday, a rumor started making the rounds: Samsung might team up with Qualcomm (Nasdaq: QCOM) to place a joint buyout bid on AMD.

There's no denying that AMD looks cheap right now, so an opportunistic buyout might make sense. But why would Sammy and Qualcomm, of all outlandish combinations, be interested?

Hey, I already know that guy!
Well, Qualcomm and Samsung actually have a strong recent history of collaboration. Samsung runs one of the three processor foundries that manufacture the Snapdragon S4 mobile processor, the other ones being pure-play foundry giants Taiwan Semiconductor Manufacturing (NYSE: TSM) and United Microelectronics (NYSE: UMC).

Manufacturing processes often need to be tailored to the precise specifications of incoming design plans, and there are always implementation problems to work through before the customer is happy. So the pair already knows how to collaborate on complex chip design issues.

Moreover, Samsung has teamed up with Qualcomm to research wireless power transmission technologies. This partnership is less of a chip play, but certainly another strong link between the two companies. And I'm sure I missed other transcontinental agreements that would further strengthen the team-up theory.

So, why would these two be interested in buying AMD together?

It's a fair question. At first glance, the company doesn't offer much in the mobile sector, where both of the proposed buyers make their hay. Instead, AMD has chosen to focus on very powerful chips for notebooks, desktops, and servers that may not meet the extreme power-efficiency needs of smartphones and tablets.

But this deal could actually make sense in the long run, kind of like the way AMD's own buyout of graphics powerhouse ATI took several years to translate into actual next-generation products. The key here is to pool the buyers' resources and manage AMD as a joint venture, lest the deal destroy the value created as AMD built a cohesive unit out of its graphics and processor assets.

What's in it for everybody?
For AMD itself, a deal like that would give it serious financial backing from two very large sugar daddies. This is very different from spinning the GlobalFoundries manufacturing unit out to investors in Abu Dhabi. That old deal split AMD in two and removed substantial assets in return for a lighter balance sheet and nimbler operations. The buyout I'm envisioning would do almost exactly the opposite, except that there's even more money flowing in.

Samsung could use a stronger presence in the crucial North American market, even if the AMD unit would focus on markets where Sammy isn't that strong. The company would love to pose a challenge to Intel on a global stage. Joining hands with Qualcomm would make the deal more likely to pass regulatory muster, since there'd be a strong American component on the buyer's side of the table.

The trickiest piece to fit into this puzzle is Qualcomm, which doesn't seem to gain anything obvious from AMD. Maybe AMD's Fusion architecture would be applicable to Qualcomm's system-on-a-chip designs, which would allow the company to bake up some unique mobile processors with specialized circuits not found anywhere else. But I'm not 100% sure whether that's technically feasible, and it's not even clear that this would gain Qualcomm a whole lot of new business anyhow.

Yea or nay, Fool?
So let's file this one under "plausible, with an asterisk." In other words, nobody will faint if the rumor comes true, but you shouldn't take out a second mortgage to invest in this buyout rumor, either.

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