AMD in $35 Billion All-Stock Acquisition of Xilinxby Dr. Ian Cutress on October 27, 2020 6:53 AM EST
After a couple of weeks of rumor, as well as a couple of years of hearsay, AMD has gone feet first into a full acquisition of FPGA manufacturer Xilinx. The deal involves an all-stock transaction, leveraging AMD’s sizeable share price in order to enable an equivalent $143 per Xilinx share – current AMD stockholders will still own 74% of the combined company, while Xilinx stockholders will own 26%. The combined $135 billion entity will total 13000 engineers, and expand AMD’s total addressable market to $110 Billion. It is believed that the key reasons for the acquisition lie in Xilinx’s adaptive computing solutions for the data center market.
AMD CEO Dr. Lisa Su
“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.”
Xilinx CEO Victor Peng
“We are excited to join the AMD family. Our shared cultures of innovation, excellence and collaboration make this an ideal combination. Together, we will lead the new era of high performance and adaptive computing. Our leading FPGAs, Adaptive SoCs, accelerator and SmartNIC solutions enable innovation from the cloud, to the edge and end devices. We empower our customers to deploy differentiated platforms to market faster, and with optimal efficiency and performance. Joining together with AMD will help accelerate growth in our data center business and enable us to pursue a broader customer base across more markets.”
As part of the acquisition, Victor Peng will join AMD as president responsible for the Xilinx business, and at least two Xilinx directors will join the AMD Board of Directors upon closing.
Part of the enablement of the acquisition is AMD leveraging its market capitalization of ~$100 billion, and a lot of the industry will draw parallels of Intel’s acquisition of FPGA-manufacturer Altera in December 2015 for $16.7 billion. The high-performance FPGA markets, as well as SmartNICs, adaptive SoCs, and other controllable logic, reside naturally in the data center markets more than most other markets. With AMD’s recent growth in the enterprise space with its Zen-based EPYC processor lines, a natural evolution one might conclude would be synergizing high-performance compute with adaptable logic under one roof, which is precisely the conclusion that Intel also came to several years ago. AMD reported last quarter that it had broken above the 10% market share in Enterprise with its EPYC product lines, and today’s earnings call is also expected to see growth. AMD is already reporting revenue up +56% year on year company-wide, with +116% in the Enterprise, Embedded, and Semi-Custom markets.
The press release states that AMD expects to save $300m in synergistic operational efficiencies within 18 months of closing, due to streamlining shared infrastructure. The deal has been unanimously approved by both sets of directors, and is subject to approval of both sets of shareholders. The transaction is expected to close by the end of Calendar Year 2021.
AMD shares are currently down 5% before the market opens. A conference call will be held at 8am ET to discuss AMD’s Third Quarter Financial results and acquisition plans.
AMD's key product lines includes its Zen based processor lines such as Ryzen and EPYC, its Graphics division for Radeon and Radeon Instinct, and its semi-custom and embedded division which has been developing the latest generation of console processors for both Sony and Microsoft.
Xilinx recently entered the market with its Versal Alveo Adaptive SoCs, built as combination programmable logic plus hardened compute logic and specialized co-processors and accelerators. Its FPGA families include Spartan, Zynq, Artix, Kintex, Virtex, and Virtex Ultrascale, used in a wide variety of commercial, embedded, and enterprise markets, including the hardware used to design processors of the future.
Source: Press Release
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Oxford Guy - Wednesday, October 28, 2020 - linkBenign in what respect?
ballsystemlord - Thursday, October 29, 2020 - linkBenign in respect to the facts:
1: No DMA access to the whole system.
2: No ROM code that can't be accessed and analyzed.
3: No instructions that people don't know how they work or what they do.
4: It's a microkernel designed for a specific task. Not a full kernel that can do anything. Therefore, programming an exploit will be harder.
5: It's not directly connected to the Ethernet port. It has to go through the main CPU to get access to that port.
IDR if it stops once the system is up and running. I'll have to listen to the CCC talk again, later.
ballsystemlord - Thursday, October 29, 2020 - link> Therefore, programming an exploit will be harder.
I wanted to clarify that it would be harder because getting the exploit to do something useful (to the cracker), will require her to work with an incomplete system.
Teckk - Tuesday, October 27, 2020 - linkThis is going to be interesting. The markets don't like it as of now haha. Is there any info on how much money is Intel making out of its Altera acquisition?
Also, "synergistic operational efficiencies" ... come on!!
Hifihedgehog - Tuesday, October 27, 2020 - linkDoesn't matter. Even if AMD does not integrate Xilinx into their products soon, Xilinx stock has been an upswing with 200% gain in value for the last five years. Unlike many of Intel's random acquisitions, Xilinx is a healthy company with good future ahead of it that will provide a good bottom line and strong foundation of combined profit.
Arsenica - Tuesday, October 27, 2020 - linkAltera is probably the only acquisition by Intel that kinda makes sense, specially compared to their investments on AI-companies (which get write down within a few quarters), McAfee, self-driving car components (that end-up not being deployed in production cars), patent trolls, LCD projector chips and even worse bets.
Spunjji - Wednesday, October 28, 2020 - linkHonestly, I find it surprising that Intel haven't been punished more for these repeatedly dismal decisions. I think McAfee was probably the worst - it sure as hell didn't do anything for the security of their processors and chipsets like they'd originally promised!
webdoctors - Tuesday, October 27, 2020 - linkLove the Ryzen CPUs, game changers for cheap high performance core counts in desktop and laptops!
However, I previously worked at ATI Technologies and everyone in silicon valley has either worked at or knows someone (roommate/spouse/mistress) that works at one of the big chip companies and knows which are the good ones and terrible ones. AMD sucks, fired so many ppl and destroyed ATI internally with terrible politics and I can't see this being good for Xilinx. Granted IBM/Intel are terrible too, but folks at Xilinx would be able to get jobs at Synopsys or places that'll treat em decent and have much better pay/benefits to boot.
HW is a terrible business, they should've bought a complimentary SW or services company if they wanted to leverage their current stock price into an acquisition. But who knows, this could be the turning point for the next trillion dollar AI company.
hehatemeXX - Tuesday, October 27, 2020 - linkTurning point into bankruptcy more like. This was/is an awful decision, period. You can't explain it any other way. No one in their right mind would spend 35B.
Arnulf - Tuesday, October 27, 2020 - linkNobody spent 35B. You don't really understand how this stuff works, do you?