AMD buys Xilinx

AMD has bought rival chip maker Xilinx in a $35 billion all-stock deal.

Both firms expect the deal to generate $300 million in cost cuts. It will also create a combined company with about 13,000 engineers.

AMD’s CEO Lisa Su will serve as the new CEO of the combined company, while Xilinx’s CEO Victor Peng will continue to lead Xilinx’s operations – being responsible for Xinlinx’s business and growth initiatives.

Both companies expect the deal to close at the end of 2021.

Su said that Xilinx is very strong in some markets, and AMD believes that the deal would enable it “to accelerate some of the AMD products into those markets”.

Xilinx, founded in 1984, specialises in creating field-programmable gate arrays (FPGAs) chips that can be reconfigured for various specialised tasks. These chips come with multiple resources, including reconfigurable interconnects and programmable logic blocks and are popular in telecommunications applications.

AMD expects the deal to enable it to expand its chip business into markets like automotive electronics and 5G wireless communications.  It is also expected to intensify AMD’s ongoing battle with Intel in the fast-growing data centre chip business.

AMD would get Xilinx’s formidable presence and technology leadership in 5G, networking, automotive, and communications. AMD’s silicon could be brought in along with Xilinx’s in those markets helping both out.

AMD would also at least level the playing field with Intel in terms of having their own FPGA technology to bring to bear on opportunities such as AI workload acceleration. It’s hard to imagine that AMD would fail to take maximum advantage of a potential merger.

The AMD-Xilinx deal also comes at a time when Intel’s manufacturing technology has fallen years behind TSMC’s technology.