Earlier, AMD announced that it had completed the acquisition of Xilinx in an all-stock transaction valued at $49.8 billion. After the acquisition, AMD CEO Su Zifeng will continue to serve as the company’s CEO, and Xilinx president and CEO Victor Peng will join AMD as president of the newly formed Adaptive and Embedded Computing Group (AECG).
Following this transaction, Xilinx shareholders will receive 1.7234 shares of AMD common stock and cash for each share of Xilinx common stock held in lieu of any fractional AMD common stock. After the acquisition, AMD’s original shareholders will hold 74% of the acquired company’s shares, Xilinx shareholders will hold the remaining 26%, and Xilinx’s common stock will no longer be listed on the Nasdaq stock market.
AMD announced on October 27, 2020, its intention to acquire Xilinx in an all-stock transaction valued at as much as $35 billion at the time. After more than a year of review, the transaction has been reviewed by all parties. AMD claims that the acquisition was completed after all necessary approvals have been obtained.
After obtaining the approvals from the anti-monopoly agencies of the United States and the European Union, on January 27 this year, the Anti-monopoly Bureau of the State Administration for Market Regulation of China issued an announcement saying that it had passed the review and decided to approve the case with additional restrictive conditions, requiring both parties to the transaction and the entity after the concentration. Fulfill the five obligations of not forcing tying in any way.
AMD’s acquisition of Xilinx will greatly enhance its strength. This manufacturer, often referred to as the “Millennium Second” in the industry, will inevitably have to wrestle with its competitors. At present, Xilinx’s business is mainly concentrated in the fields of FPGA chips, programmable SOC and ACAP, while AMD specializes in computing and graphics business.
Compared with CPU and GPU, the FPGA market is not large, but it is a very important technology for key industries such as 5G communications, data centers, and national defense. The biggest purpose of AMD buying Xilinx is to enhance the strength of data center technology. The $7 billion acquisition of Mellanox in 2020 is similar.
After the merger of Xilinx, AMD has become another semiconductor manufacturer with three product lines of CPU, GPU and FPGA after Intel. The results released by AMD previously showed that the annual revenue in 2021 was US$16.434 billion, a year-on-year increase of 68%; the adjusted net profit reached US$3.435 billion, a year-on-year increase of 118%. With this performance, AMD has increased by 4 seats compared with 2020, ranking among the top ten semiconductor companies in the world.
With the inclusion of Xilinx, the scale gap between AMD and Intel and Nvidia, the two data center chip giants, has further narrowed and even challenged. As of the latest trading day, the market capitalizations of AMD, Intel and Nvidia were $137 billion, $193.7 billion and $606.7 billion, respectively. If you add Xilinx, AMD’s market value will reach $185.4 billion.
I think the future pattern of the three major companies in the US chip field has been formed. What do you think?