Near the end of October, Advanced Micro Devices (AMD) announced a plan to acquire Xilinx in an all-stock transaction valued at $35 billion.
The move is aimed at creating a higher-performing computing company—something timely as the rise in working from home due to the COVID-19 pandemic has heightened demand for video conferencing, cloud computing, and streaming services. Both companies are leading microchip makers, and the combination of the two is expected to expand AMD’s product portfolio and customer base. The added leverage will be used to expand in other areas like data centers, gaming, PCs, 5G communications, and delivering electronic components for the automotive, industrial, aerospace, and defense sectors.
The deal, which is anticipated to close by the end of 2021, will mark one of the largest acquisitions in the history of the microprocessor industry, second only to NVIDIA’s deal to acquire Arm for $40 billion earlier this year.
“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 AMD President and CEO Dr. Lisa Su. “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. 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.”
Together, AMD and Xilinx will have 13,000 engineers and over $2.7 billion annually in R&D investment. This may give AMD a stronger foothold to contend with rivals such as Intel for microprocessors and NVIDIA for data centers and gaming.
“We are excited to join the AMD family. Together, we will lead the new era of high performance and adaptive computing,” said Xilinx CEO Victor Peng. “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.”