UPDATED. 2024-05-17 07:44 (금)
AMD to buy Xilinx for US$35 billion
AMD to buy Xilinx for US$35 billion
  • Nari Lee
  • 승인 2020.10.29 08:18
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4th largest M&A in semiconductor industry 
Image: AMD
Image: AMD

AMD will buy rival semiconductor company Xilinx in an all-stock deal worth US$35 billion, the pair announced on Tuesday.

AMD to will likely leverage Xilinx’s field programmable gate array (FPGA) to increase its competence in offerings for data centers and machine learning.

Xilinx stockholders will receive 1.7234 shares of AMD stock for each Xilinx share they hold, or approximately $143 per share of Xilinx stock.

AMD stockholders will own about 74% of the combined company, with Xilinx stockholders owning approximately 26%.

The deal now faces approval from authorities in the US, the UK, European Union and China as well as shareholders of both companies.

AMD has little market share in processor and the deal is highly likely to pass without hitch. The approval processes is expected to wrap up by the end of 2021.

AMD CEO Lisa Su will lead the combined company. Xilinx CEO Victor Peng will join as president and be responsible for the Xilinx business and strategic growth initiatives. At least two Xilinx directors will join the AMD's board.

Shares of AMD (AMD) fell in 5% in premarket trading, while Xilinx (XLNX) stock soared 10%.

"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," Su said in a statement. The combined company, which will have 13,000 employees, will spend over US$2.7 billion in research and development per year, the CEO said.

AMD saw sales jump 26% quarter over quarter in the second quarter this year to US$1.93 billion thanks to high demand for CPUs for PCs and gaming consoles in light of the COVID-19 pandemic. 

Back in 2015, Intel bought Altera, the world’s second largest FPGA company, for US$16.7 billion. Intel strengthened its data center business with the acquisition. AMD is likely planning the same with Xilinx, which supplies its chips for wireless communication, data centers and automobiles. Data centers have been a key focus for Xilinx in recent years.

The deal between AMD and Xilinx is the fourth largest to data in the semiconductor industry. Nvidia and Arm’s US$40 billion deal in 2020 was the largest, followed by Avago Technologies and Broadcom’s US$37 billion in 2015 and SoftBank and Arm’s US$32 billion in 2016.

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