AMD to buy Apple supplier Xilinx for $35 billion in stock

Advanced Micro Devices, or AMD, has agreed to pay $35 billion in stock for Xilinx, the biggest maker of chips called field programmable gate arrays that can be reconfigured for a variety of specialized tasks in the field.

Don Clark for The New York Times:

A.M.D., known mainly as Intel’s longtime rival in microprocessors that power most computers, plans to use the acquisition to broaden its business into chips for markets like 5G wireless communications and automotive electronics. The transaction could also help A.M.D. grab a bigger share of component sales for data centers and counter a prominent rival, Nvidia, which is also bulking up.

The all-stock deal, announced on Tuesday along with A.M.D.’s third-quarter financial results, would be close to the most valuable acquisition in the chip industry’s history. Those bragging rights are currently held by Nvidia for its proposed $40 billion deal for British chip designer Arm, which was announced last month.

Last Thursday, Intel reported a 29 percent decline in quarterly profits, which caused its stock to fall more than 10 percent. A.M.D., by contrast, reported on Tuesday that its quarterly profit rose by 148 percent.

A.M.D.’s stock, which was trading five years ago at about $2 a share, has risen nearly 80 percent this year and closed Monday at slightly above $82. A.M.D.’s market value stands now at nearly $100 billion.

A.M.D.’s interest in Xilinx emulates a path taken by Intel. In 2015, Intel entered the same business by paying $16.7 billion for Altera, Xilinx’s main competitor. That deal, inspired partly by the prospect of producing Altera chips in Intel factories, has failed to generate big returns as Intel’s manufacturing processes have fallen behind rivals.

MacDailyNews Take: AMD buying Xilinx is just further proof that Intel is slow, inefficient, old news.

Buh-bye, Intel slug! Intel served its purpose, but has been a boat anchor for years. Hello, Apple-designed ARM-based Macs! — MacDailyNews, April 23, 2020