AMD Completes $49B Xilinx Acquisition, Largest Chip Deal In History
With the acquisition, AMD is expanding beyond its purview of CPUs and GPUs with a large portfolio of reprogrammable chips called field programmable gate arrays, or FPGAs, that it says will significantly expand the company’s opportunities in data centers, embedded computing and telecommunications.
AMD said it has completed its $49 billion acquisition of Xilinx to create the “industry’s high-performance and adaptive computing leader,” marking the largest chip deal in history.
In conjunction with the deal, the Santa Clara, Calif.-based company said CEO Lisa Su has been elected chair of AMD’s board. John E. Caldwell, who has been chair of AMD’s board since 2016, has been elected as independent director, and two former Xilinx board members, Jon Olson and Elizabeth Vanderslice, have also been elected to AMD’s board.
The all-stock deal’s $49 billion price tag is much higher than the initial $35 billion figure given in October 2020, representing the double-digit growth experienced by AMD’s stock price since the deal was announced. The deal closed days after receiving its last necessary approval from regulators.
With the acquisition, AMD is expanding beyond its purview of CPUs and GPUs with a large portfolio of reprogrammable chips called field programmable gate arrays, or FPGAs, that it said will significantly expand the company’s opportunities in data centers, embedded computing and telecommunications. Xilinx also has a footprint in other markets, like defense, broadcast and consumer electronics, which will help expand its total addressable market to $135 billion from $80 billion, according to AMD.
“The acquisition of Xilinx brings together a highly complementary set of products, customers and markets combined with differentiated IP and world-class talent to create the industry’s high-performance and adaptive computing leader,” Su said in a statement.
As part of the acquisition, former Xilinx CEO Victor Peng has joined AMD in the newly formed Adaptive and Embedded Computing Group, which will serve as new home for Xilinx’s FPGA, adaptive system-on-chips, AI engines and software products. AMD said it expects the Xilinx acquisition to be accretive to margins, earnings per share and free cash flow generation in the first year.
“The rapid expansion of connected devices and data-intensive applications with embedded AI are driving the growing demand for highly efficient and adaptive high-performance computing solutions,” Peng said in a statement.
AMD said the combined organization now has a total of more than 15,000 engineers, though it didn’t say what the total employee count is. As of December 2021, AMD had roughly 15,500 employees, and as of April 2021, Xilinx had 4,890 employees, according to their respective 10-K filings.
The deal’s closing greatly contrasts with Nvidia’s failed $40 billion acquisition of Arm, which fell apart last week due to stern pushback from regulators over anticompetitive concerns.
Dominic Daninger, vice president of engineering at Nor-Tech, a Burnsville, Minn.-based high-performance computing systems integrator, told CRN last week that the AMD-Xilinx deal likely didn’t receive as much scrutiny because AMD is a smaller player in the CPU and GPU markets in relation to Intel and Nvidia, respectively.
“You take somebody like Nvidia. I don’t know what their percentage of the GPU market is, but it’s got to be way over 50 percent. I think regulators look with more scrutiny when you’re dealing with somebody like that,” he said.
The AMD-Xilinx deal closed shortly after AMD said that its data center revenue more than doubled in 2021, thanks to strong uptake of its EPYC CPUs and Instinct GPUs for servers.