AMD is buying semiconductor company Xilinx for $35 billion to help the chipmaker compete against Intel and Nvidia in the data center market.
Xilinx is a San Jose-based company best known for producing field programmable gate array (FPGA) chips, which are often used in the telecommunication, automotive, aerospace, and defense industry to power hardware.
Unlike a general CPU processor, an FPGA doesn’t need software instructions to run. Instead, the chip can be programmed via hardware through reconfigurable integrated circuits, enabling lower latency.
Xilinix has also recently developed a new class of programmable processor called the ACAP, which leverages hybrid technologies for a massive speed gain. AMD now wants to add the company’s technology into its portfolio of data center products.
“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,” AMD CEO Lisa Su said in statement.
On the same day, AMD also reported earnings for the third quarter, which show the company’s revenue for the “Enterprise, Embedded and Semi-Custom” market grew a whopping 116 percent year over year to $1.13 billion. The company credits the growth to AMD’s Epyc processor line, which saw an uptick in the data-centric cloud computing and super computing markets.
The acquisition is part of a growing consolidation in the semiconductor industry. In 2015, Intel bought Altera, another major producer of FPGA chips, to help it expand in the data center market—the major cash cow in today’s IT space. Nvidia is also trying to acquire ARM to accelerate the company’s data center products for AI-based processing.
In AMD’s case, the proposed merger with Xilinx will create a company with a combined 13,000+ engineers combined and $2.7 billion in R&D investments. Pending regulatory approvals, the acquisition is expected to close by the end of 2021.
“Together, we will lead the new era of high performance and adaptive computing,” said Victor Peng, Xilinx president and CEO, who will remain at AMD. “Our leading FPGAs, Adaptive SoCs, accelerator and SmartNIC solutions enable innovation from the cloud, to the edge and end devices.”