AMD is pursuing FPGA maker Xilinx and may be close to a deal according to a Wall Street Journal report yesterday. The price tag could be around $30 billion and the deal, if it happens, could close as quickly as next week, according to the report.
AMD, whose product line includes CPUs and GPUs, has mounted a strong and steady comeback in recent years in CPUs, challenging Intel’s dominance. The company’s Epyc microprocessor line, launched in 2017, has steadily gained market share in the datacenter, cloud, and HPC, including design wins in forthcoming U.S. Exascale supercomputers.
According to the WSJ, “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.”
Xilinx has reportedly suffered during tensions between the U.S. and China, and the U.S. administration’s limitations on shipments to China’s Huawei Technologies. Analysts estimated Huawei accounted for roughly 6% to 8% of Xilinx’s revenue, according to the WSJ report.
Here’s an excerpt from the WSJ article characterizing recent m&a activity:
“Should AMD and Xilinx reach an agreement, three of the year’s largest deals so far would be in the semiconductor industry, according to Dealogic data. Analog Devices Inc. in July agreed to pay more than $20 billion for Maxim Integrated Products Inc. and Nvidia Corp. in September agreed to pay $40 billion for Arm Holdings, the British chip designer backed by SoftBank Group Corp.
“Mergers-and-acquisitions activity generally has been sluggish in 2020 as a result of the pandemic, with announced global and U.S. volume down 18% and 40%, respectively, according to Dealogic. Lately, however, it has shown signs of life as companies gain confidence to make big strategic moves. NextEra Energy Inc. recently approached Duke Energy Corp. with a takeover proposal that would likely value the North Carolina utility at well over $60 billion and count as the year’s largest deal.”
Link to Wall Street Journal report: https://www.wsj.com/articles/amd-is-in-advanced-talks-to-buy-xilinx-11602205553?mod=hp_lead_pos4