Microprocessor maker AMD is in advanced talks to take over FPGAs producers Xilinx Inc in a deal that could go up to $30 billion. The two companies are discussing a deal that could come together as soon as next week, sources said.
There is no guarantee they will get there, especially given that the talks had stalled before recently restarting, according to sources. However, Chipmaker Xilinx surged as much as 17% on Friday after The Wall Street Journal reported Advanced Micro Devices is in talks to buy the firm for more than $30 billion.
AMD’s market value now tops $100 billion after its shares soared 89% this year as the coronavirus pandemic stokes demands for PCs, gaming consoles, and other devices that use the company’s chips.
Second-quarter revenue rose 26% to $1.93 billion, while net income jumped more than fourfold to $157 million on the back of record notebook and server-processor sales, AMD said.
The surge in AMD shares could embolden the company to make an acquisition using its stock as currency. Xilinx has a market value of about $26 billion, with its shares up about 9% so far this year, just ahead of the S&P 500’s 7% rise. With a typical takeover premium, a deal would value the company at more than $30 billion.
Xilinx, Inc. is an American technology company that develops highly flexible and adaptive processing platforms. The company invented the field-programmable gate array (FPGA), programmable system-on-chips (SoCs), and the adaptive compute acceleration platform (ACAP).
It is the semiconductor company that created the first fabless manufacturing model. Xilinx’s products are used across many industries and technologies, including the data center, wired & wireless communications, AI/ML, automotive, industrial, consumer, aerospace and defense, and Broadcast & Pro-AV.
AMD deal with Xilinx could be triggered by past incidents
AMD had some issues in its Opteron server processor line as the Great Recession was starting up, and it lost a key deal to supply supercomputer maker Cray with processors. Seeing the obvious benefits of the Opteron processor and its HyperTransport interconnect, Cray tightly coupled its “SeaStar” and “Gemini” interconnects to the Opteron design.
When AMD was late in delivering several generations of Opteron chips, once because of a bug and once because of issues at process ramps at GlobalFoundries, Cray had second thoughts about this tight coupling between processors and interconnects and backed off to the PCI-Express bus so it could use any processor it wanted in its future “Cascades” systems, which debuted a few years later.
Interestingly, Intel essentially mimicked the Opteron design with the “Nehalem” Xeon 5500s launched in March 2009, a little more than a year into the Great Recession, and Cray could have linked to the QuickPath Interconnect that is analogous to AMD’s HyperTransport. But the lesson was learned, and with important ramifications for both AMD and Intel.
AMD basically walked away from not only HPC, but servers once the Nehalems took off, and they did mostly because server OEMs and ODMs had only the resources to back one server CPU horse starting in 2009, and that one horse was Xeon.
Then, in early 2012, seeking to find a new niche and a new strategy, AMD caught microserver and interconnect fabric religion at almost exactly the same time that Intel caught HPC interconnect religion because Intel was trying to take on the IBM-Nvidia tag team in accelerated computing.
There have been other incidents that have driven AMD to further heights to try and catch up with the competition and also take a piece of the market but, its interest in Xilinx sends the right signals, which means they’re willing to take on this billion-dollar deal if it goes through.
Source: Next Platform
Author: Moses Echodu
Moses is an avid Sports and Tech enthusiast. He loves to keep up to date with all the latest information and research on some of the most compelling stories.