AMD has reached an agreement to acquire Xilinx for $ 35 billion, the chip maker announced on Tuesday. According to Dr. Lisa Su, CEO of AMD, is an effort to make AMD the "Industry Leader for High Performance Computing". The two companies would focus on making CPUs, GPUs, FPGAs, SoCs, and software for PCs and games, as well as products and software for the automotive, communications, industrial, aerospace and defense industries.
"Working with AMD will help accelerate the growth of our data center business and reach a broader customer base in more markets," added Victor Peng, President and CEO of Xilinx.
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Su would be the CEO of the combined company while Peng would become president of the Xilinx business arm. The combined company is valued at $ 135 billion, but the acquisition has not yet cleared any regulatory hurdles, including approval from AMD and Xilinx shareholders. AMD expects to close the deal by the end of 2021.
The acquisition is part of a wave of consolidation that is sweeping the chip industry as semiconductor companies scramble to build products packaged in phones, personal computers, data centers, automobiles, and other computing devices. Nvidia is trying to buy Arm, a developer of chips and chip technology used in every smartphone. This is a significant expansion that extends beyond the graphics and artificial intelligence chips business.
Continue reading: The best gaming desktops of 2020Xilinx makes an unusual type of processor called an FPGA, short for Field Programmable Gate Array. Most processors are fixed in design, but FPGAs can be reprogrammed to perform many different tasks. They are expensive, but companies that manufacture network equipment have long relied on them to support the latest communication standards.
FPGAs also lend themselves to two big new trends - 5G devices and chips that accelerate the work of artificial intelligence. A big priority for Xilinx is AI chips.
A merged AMD and Xilinx could "become a leader in computing platforms in the next high-growth computing segment: on the edge of the network in base stations," said analyst firm Jefferies. "Unlike the data center, where we believe general-purpose architecture wins, we will find that the advantage requires semi-custom, workload-specific, low-latency solutions that have the strengths of XLNX and AMD."
Intel acquired Xilinx competitor Altera in 2015. AMD and Intel have long been the main suppliers of chips for PCs and data centers. While AMD seemed to be dying for a while, the company has instead become a powerhouse, in part because it abandoned its manufacturing operations and turned to ultra-high-performance chips for data centers. Intel has been grappling with product delays lately and has abandoned markets like 5G mobile chips.
