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AMD acquires Xilinx for $35 billion, targeting data center market

Published 29 October 2020

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stuart-crowley
W.media | editor
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Weeks ago, we reported that US semiconductor chipmaker Advanced Micro Devices (AMD) had plans to purchase its rival Xilinx. Today, AMD has confirmed this move: it will acquire Xilinx for US$35 billion.

This all-stock acquisition makes it one of the biggest in the semiconductor chips industry, behind NVIDIA’s record-high $40 billion acquisition of Arm Holdings in September.

“Our acquisition of Xilinx marks the next leg in our journey to establish AMD as the industry’s high performance computing leader and partner of choice for the largest and most important technology companies in the world,” said Dr. Lisa Su, President and CEO of AMD.

AMD said the combined company will capitalise on opportunities spanning some of the industry’s most important growth segments from the data center to gaming, PCs, communications, automotive, industrial, aerospace and defense.

“The Xilinx team is one of the strongest in the industry and we are thrilled to welcome them to the AMD family. By combining our world-class engineering teams and deep domain expertise, we will create an industry leader with the vision, talent and scale to define the future of high performance computing,” added Ms. Su.

The combined team will comprise 13,000 talented engineers and over $2.7 billion of annual R&D investment.

The data center chip market is heating up

AMD’s mega-acquisition move is similar to that of NVIDIA’s purchase of ARM Holdings. This also means that both companies will officially scale up competition in the data center chips market, which is currently led by Intel.

“We are excited to join the AMD family. Our shared cultures of innovation, excellence and collaboration make this an ideal combination. Together, we will lead the new era of high performance and adaptive computing,” said Victor Peng, President and CEO of Xilinx.

As the pandemic continues to disrupt the global workforce, demand for cloud and data centres continues to surge. Semiconductor chips that are used to power data centers have thus been positively impacted, becoming an extremely lucrative industry in a ‘new normal’ society powered by tech.

“We empower our customers to deploy differentiated platforms to market faster, and with optimal efficiency and performance. Joining together with AMD will help accelerate growth in our data center business and enable us to pursue a broader customer base across more markets.” added Mr. Peng.

Mr. Peng, will join AMD as president responsible for the Xilinx business and strategic growth initiatives, effective upon closing of the transaction, which is expected to close by the end of 2021. Until then, the parties remain as separate, independent companies.

This week, Intel reported a 10% drop in its shares due consumers shifting to buy cheaper gadgets and cuts on data center spending by businesses and governments. Xilinx’s shares, on the other hand, increased by 8.55% after the announcement.

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Jie Yee Ong

Tech Reporter, W.Media

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