AMD in $35 Billion All-Stock Acquisition of Xilinxby Dr. Ian Cutress on October 27, 2020 6:53 AM EST
After a couple of weeks of rumor, as well as a couple of years of hearsay, AMD has gone feet first into a full acquisition of FPGA manufacturer Xilinx. The deal involves an all-stock transaction, leveraging AMD’s sizeable share price in order to enable an equivalent $143 per Xilinx share – current AMD stockholders will still own 74% of the combined company, while Xilinx stockholders will own 26%. The combined $135 billion entity will total 13000 engineers, and expand AMD’s total addressable market to $110 Billion. It is believed that the key reasons for the acquisition lie in Xilinx’s adaptive computing solutions for the data center market.
AMD CEO Dr. Lisa Su
“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. This is truly a compelling combination that will create significant value for all stakeholders, including AMD and Xilinx shareholders who will benefit from the future growth and upside potential of the combined company. 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.”
Xilinx CEO Victor Peng
“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. Our leading FPGAs, Adaptive SoCs, accelerator and SmartNIC solutions enable innovation from the cloud, to the edge and end devices. 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.”
As part of the acquisition, Victor Peng will join AMD as president responsible for the Xilinx business, and at least two Xilinx directors will join the AMD Board of Directors upon closing.
Part of the enablement of the acquisition is AMD leveraging its market capitalization of ~$100 billion, and a lot of the industry will draw parallels of Intel’s acquisition of FPGA-manufacturer Altera in December 2015 for $16.7 billion. The high-performance FPGA markets, as well as SmartNICs, adaptive SoCs, and other controllable logic, reside naturally in the data center markets more than most other markets. With AMD’s recent growth in the enterprise space with its Zen-based EPYC processor lines, a natural evolution one might conclude would be synergizing high-performance compute with adaptable logic under one roof, which is precisely the conclusion that Intel also came to several years ago. AMD reported last quarter that it had broken above the 10% market share in Enterprise with its EPYC product lines, and today’s earnings call is also expected to see growth. AMD is already reporting revenue up +56% year on year company-wide, with +116% in the Enterprise, Embedded, and Semi-Custom markets.
The press release states that AMD expects to save $300m in synergistic operational efficiencies within 18 months of closing, due to streamlining shared infrastructure. The deal has been unanimously approved by both sets of directors, and is subject to approval of both sets of shareholders. The transaction is expected to close by the end of Calendar Year 2021.
AMD shares are currently down 5% before the market opens. A conference call will be held at 8am ET to discuss AMD’s Third Quarter Financial results and acquisition plans.
AMD's key product lines includes its Zen based processor lines such as Ryzen and EPYC, its Graphics division for Radeon and Radeon Instinct, and its semi-custom and embedded division which has been developing the latest generation of console processors for both Sony and Microsoft.
Xilinx recently entered the market with its Versal Alveo Adaptive SoCs, built as combination programmable logic plus hardened compute logic and specialized co-processors and accelerators. Its FPGA families include Spartan, Zynq, Artix, Kintex, Virtex, and Virtex Ultrascale, used in a wide variety of commercial, embedded, and enterprise markets, including the hardware used to design processors of the future.
Source: Press Release
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sing_electric - Wednesday, October 28, 2020 - linkMarket share? Just like everyone else in capitalism?
Buck Turgidson - Saturday, October 31, 2020 - linkMan, there are some strange comments on this story. Here’s the deal: FPGA’s are an increasingly important segment of the semiconductor business and Xilinx is the leader in that space. Sure seams like a smart acquisition to me. Plus, if you’ve never played with FPGA hobbyist programming, you don’t know what you’re missing out on, and Xilinx based development boards are terrific for this stuff (just as surely as Nvidia’s Jetson Nano is a great builders platform).
six_tymes - Monday, November 2, 2020 - linkI smell corruption. this is OK but nvidia buying arm isn't? puuuulease... the corrupt are at it again.
Smell This - Tuesday, November 3, 2020 - link
Uhhh . . . what?
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wayneperrier - Thursday, November 12, 2020 - linkMy God, you people have no idea what is going on in the Data Center. Why do you think Intel bought Altera? FPGAs are being used more and more as co-processors for high-end servers. Reconfigurable hardware that can be custom-designed to solve certain problems much faster than a general-purpose CPU. Did anyone look at Xilinx's website (ALVEO and ACAP) ?
Matthias B V - Saturday, April 10, 2021 - linkIt is a great move and I was expecting AMD always to look for a FPGA / ASIC designer to include in their portfolio however I would have expected some smaller ones to tale over.
Next they maybe should look into Marvell oder companies alike to tale over. Marvell would be a great match providing ARM / Cavium ARM talent to revive K12 but even more important networking technology just like Nvidia got with Mellanox. Networking and interconnect KnowHow is important round the profile. They also might have good access to automotive markets which AMD could also use.
I was expecting Marvell to be always a takepver candidate for AMD or Nvidia as it has it all: Networking, ASICs, ARM CPUs and is not too big in size...