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 $300m in synergistic operational efficiencies within 18 months of closing, due to streamlining shared infrastructure. The deal has been unanimously approved by both sets of directors, and is subject to approval of both sets of shareholders. The transaction is expected to close by the end of Calendar Year 2021.
AMD shares are currently down 5% before the market opens. A conference call will be held at 8am ET to discuss AMD’s Third Quarter Financial results and acquisition plans.
AMD's key product lines includes its Zen based processor lines such as Ryzen and EPYC, its Graphics division for Radeon and Radeon Instinct, and its semi-custom and embedded division which has been developing the latest generation of console processors for both Sony and Microsoft.
Xilinx recently entered the market with its Versal Alveo Adaptive SoCs, built as combination programmable logic plus hardened compute logic and specialized co-processors and accelerators. Its FPGA families include Spartan, Zynq, Artix, Kintex, Virtex, and Virtex Ultrascale, used in a wide variety of commercial, embedded, and enterprise markets, including the hardware used to design processors of the future.
Source: Press Release
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Hifihedgehog - Tuesday, October 27, 2020 - linkSomeone also brought up that Xilinx has expertise in chiplets, which should prove useful. The fanboys going on a rampage here are likely Intel converts thinking AMD is pulling a McAfee or an Infineon, but this is far from either of those cases. I hope that "$" jump out at them because Xilinx and AMD are two powerhouse companies and combining forces merely for increasing financial prowess is a huge win.
Spunjji - Wednesday, October 28, 2020 - linkthat's just it. They don't even have to actually achieve that legendary "synergy" to benefit, although no doubt ways will be found to push that angle with datacentre products.
tipoo - Tuesday, October 27, 2020 - linkThey're spending stock, not cash, and it makes sense when the valuation is sky high for AMD
Spunjji - Wednesday, October 28, 2020 - link"WTF! They spent all the money they earned"-
Wrong. Didn't even read the headline, let alone the article. Mega-derp.
YB1064 - Wednesday, October 28, 2020 - linkNot just any FPGA company. Xilinx are the de-facto leader in the FPGA space. AMD chips on National Instruments products, man I hope that day arrives soon!
ballsystemlord - Tuesday, October 27, 2020 - linkI wonder if we'll get the opportunity to have an opensource FPGA programmer. As opposed to the current tool for Xilinx which requires your MAC address to even download it and an internet connection to use it so that it can call home transmitting God-only-knows what about you and your programs.
Oxford Guy - Tuesday, October 27, 2020 - linkYou’re running everything on hardware with black box spyware in it. You had better be air gapped and more if you are trying to achieve a shred of data privacy.
Oxford Guy - Tuesday, October 27, 2020 - linkAnd by hardware I am referring to CPUs and other chips/parts as well.
brucethemoose - Wednesday, October 28, 2020 - linkI think its more about accessability. High accessability is partially why Nvidia GPUs became such popular accelerators.
ballsystemlord - Wednesday, October 28, 2020 - linkIf CPUs and other chips/parts were regularly uploading data to the internet (and required an internet connection to function), I would think it would be publicized.
I am aware that there are bugs in the HW. And I am aware of AMD's PSP. I don't like it either, but it's much more benign than the Intel ME equivalent.