AMD Acquires Xilinx

Deal Overview

The merger will create the industry’s high-performance and adaptive computing leader, with considerably increased scale and the strongest portfolio of leading computing, graphics, and adaptable SoC solutions. In the first year, AMD anticipates the purchase to be accretive to non-GAAP margins, non-GAAP EPS, and free cash flow generation. The purchase of Xilinx brings together a highly complementary collection of technologies, customers, and markets, as well as distinctive IP and world-class personnel, to build the industry’s high-performance and adaptive computing leader. Furthermore, Xilinx provides industry leading FPGAs, adaptable SoCs, AI engines, and software expertise, allowing AMD gain a larger market share and to provide the industry’s strongest portfolio of high-performance and adaptive computing solutions.

Industry focus

Advanced Micro Devices, Inc. operates as a semiconductor company worldwide. The company operates in two segments, Computing and Graphics; and Enterprise, Embedded and Semi-Custom. About AMD, for more than 50 years has driven innovation in high-performance computing, graphics and visualization technologies ― the building blocks for gaming, immersive platforms and the data center. Xilinx, Inc. develops highly flexible and adaptive computing platforms that enable rapid innovation across a variety of technologies – from the cloud, to the edge, to the endpoint. Xilinx is the inventor of the FPGA and Adaptive SoCs, designed to deliver the most dynamic computing technology in the industry.

Words from Deal participants

According to a joint company statement, “the combined company will have the ability to capitalize on opportunities spanning some of the industry’s most important growth segments, including data centers, gaming, PCs, communications, automotive, industrial, aerospace and defense. The deal will result in strong synergies between AMD traditional strengths in PC and gaming (along with an increasingly robust position in the data centre) with Xilinx’s established relationships and FPGA and SmartNIC sales in communications infrastructure, industrial, automotive, aerospace and defense and other key verticals: the deal expands AMD’s total addressable market to an estimated $110 billion”. According to Xilinx’s Peng: “The Xilinx team is one of the strongest in the industry and we are thrilled to be joining AMD. Our shared cultures of innovation, excellence and collaboration will enable us to accelerate growth in the data center and pursue a broader customer base across more markets as a combined company.”

 Conclusions

The acquisition of Xilinx is expected to complement AMD’s growing prominence in data center sales, while also forging a clear path for further extension into new markets including aerospace, automotive and communications infrastructure within the near-term. Combining AMD and Xilinx creates the industry’s high performance and adaptive computing leader. This results in AMD’s significantly expanded leadership product portfolio, unmatched technology capabilities and software expertise. There have been formed strong synergies between AMD traditional strengths in PC and gaming with Xilinx’s established relationships. The new AMD will cover the most important markets and customers in the world with a combined TAM of approximately $135 billion in 2023

Read and download the full report here

Authors: Luca Vitale, Rebecca Ballarino, Daniel Comploj, Lorenzo Marsicano, Julien Ruiz

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