Chip maker Advanced Micro Devices (NYSE: AMD) could be an attractive acquisition target for companies, including Broadcom Corp. (NASDAQ: BRCM) and Oracle (NASDAQ: ORCL), an analyst at Think Equity wrote in a note to clients.

“AMD represents an attractive acquisition opportunity for strategic partners such as Broadcom, Oracle/Sun, among others, looking to strengthen their presence in the semiconductor market and attack Intel’s lucrative profit pool in PC/servers,” analyst Krishna Shankar said.

Shankar’s target acquirer list for AMD includes Broadcom, IBM (NYSE: IBM) and Oracle (NASDAQ: ORCL).

He predicts that if Broadcom is to acquire AMD, it will have access to AMD PC server, graphics which can add siginficant revenues. AMD could also help Broadcom to counter Intel’s attack into its core areas such as cable modems and set top boxes.

Shankar said for IBM and Oracle, the acquisition of AMD would be accretive and provide access to x86 server processor and graphics/central processing unit computing expertise.

The analyst said from Texas Instruments (NYSE: TXN) and Qualcomm’s (NASDAQ: QCOM) viewpoint, the decision by Microsoft (NASDAQ: MSFT) to port future versions of Windows to Advanced RISC Machine (ARM) PC and servers would indicate a need to bulk up quickly on PC and server processor design and gain access to Intel’s quasi-monopolistic pool of profits in the x86 PC and server space.

Meanwhile, private equity buyers such as TPG, Siverlake, Carlyle, etc. could also be attracted towards AMD due to its cheap valuation, cash flow, and breakup potential into PC, server, graphics companies.

The analyst said AMD’s fundamentals continue to improve gradually with good initial reviews for new Fusion notebooks introduced by HP, Lenovo, Toshiba, and Sony. AMD’s graphics designs for the new MacBook Pro family and better traction with the new Opteron server platforms are positive trend.

Shankar, who has a “buy” rating and $14 price target on AMD stock, believes that the Llano Fusion chip for high-end notebooks and desktops is on schedule to ramp in the second half of 2011.

In servers, AMD is getting more revenue traction from all key server vendors for the Opteron 4000/6000/8000 platform and the analyst expects AMD’s server market share will gradually improve from current levels of 5 percent to 10 percent by the end of 2011.

On the cash flow perspective, AMD has solid free cash flow and good debt reduction of almost $1.5 billion over the past 12 months.

On a long-term basis, AMD expects gross margin to grow more than 50 percent with consistent operating margins of 10 percent to 15 percent and solid free cash flow due to the low capital intensity of the new AMD fabless model.

Shankar believes that new server products and unified CPU/GPU Fusion PC platforms may allow AMD to gain share and be consistently profitable in 2011, with the fabless business model and separation from Global Foundries.

“We continue to recommend AMD as a value idea with potential positive catalysts, such as new Fusion PC and server products; a platform approach to selling mainstream PC, server solutions at competitive prices, coupled with the transformation to a fabless business model and separation of Global Foundries,” the analyst said.

Shankar said though AMD likely lost market share in server processors to Intel (NASDAQ: INTC), he believes that AMD’s new server products are gaining traction and estimate that the company may finally start to regain market share.

“We believe that new platforms, such as the Fusion PC platforms with unified CPU and GPU on the same chip, coupled with traction in the server market may allow AMD to be consistently profitable in 2011,” the analyst added.

Shares of AMD closed Monday’s regular trading session at $9.21 on the NYSE