AMD acquires Xilinx for $35 billion, creating a data center giant

After weeks of speculation, AMD has confirmed that they will be acquiring Xilinx for $35 billion, adding FPGAs into the CPU giant’s technological portfolio. This deal will be an all-stock transaction, using AMD’s high share price to fund the acquisition. 

When combined, AMD and Xilinx will have a Total Addressable Market (TAM) of $110 billion, over 13,000 engineers and annual R&D investment of over $2.7 billion. This deal will intensify AMD’s battle with Intel within the data center market, giving AMD new product options while offering Xilinx a stronger brand name and greater access to customers. 

Xilinx specialised in FPGAs, programmable processors which can be used to accelerate specialised tasks. Adding high-performance FPGAs to AMD’s technological portfolio will allow the company to embed itself deeper into the data center market, a high margin market with a broad base of customers. 

Below is what AMD’s Lisa Su had to say about the acquisition;

 

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.

   
This acquisition is expected to close before the end of 2021, seeing two of Xilinx’s directors join AMD’s board of directors. AMD expects to save $300 million thanks to increased operational efficiencies after the companies merge. 

AMD is due to host their Q3 2020 Earnings Call later today, during which AMD will discuss the acquisition in more detail.