By - Sanjeeb Baruah
Highlights
- AMD had announced the deal with Xilinx Inc (XLNX) in October 2020.
- At the time, the chip manufacturer was valued at US$35 billion.
- But the XLNX stock’s price gains have pushed the valuation higher.
In what is being called a record-breaking deal in the semiconductor industry, American chip manufacturing giant Advanced Micro Devices (AMD) on Monday said that it finalized a deal to acquire chipmaker Xilinx Inc. (XLNX) for about US$50 billion.
The eye-popping deal comes after Nvidia Corporation (NVDA) canceled its purchase of SoftBank-owned Arm, citing regulatory hurdles. Arm is a leader in AI, Cloud, and LoT technologies.
AMD CEO Lisa Su told Reuters that the company was in talks with regulators to approve the acquisition.
The acquisition aims at bolstering its position in the data center market. Su added that the products of the two companies complement each other.
AMD had first announced the deal in October 2020. At the time, Xilinx Inc. was valued at US$35 billion. But XLNX’s stock gains overtime pushed the valuation higher, according to Reuters.
The AMD was up more than 4% on Monday after the latest announcement.
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Source: Megapixl.com
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How AMD will benefit from Xilinx purchase
AMD CEO Lisa Su said the Xilinx acquisition would give the company a better foothold in critical markets like data centers. Xilinx, she said, has a strong network and AI presence. Xilinx’s products are also widely used in the 5G communication, automotive, aerospace, and defense sectors.
Su said AMD had “little presence” in those markets that require high-performance computing products.
The combined entity will have over 15,000 engineers to drive growth. It will rely on companies like Taiwan’s leading chip manufacturer TSMC as part of its plan for the data center market.
AMD is pressing on the accelerator in its competition with Intel in the data center market. Intel has been struggling with internal manufacturing issues.
According to Reuters, Su will be the CEO of the combined company, while Xilinx CEO Victor Peng will be the president of the newly created Adaptive and Embedded Computing Group. The deal is likely to generate US$300 million in cost savings.