AMD is preparing to add “new weapon”, continue to dry blood with Intel

The trend of consolidation mergers in the semiconductor industry is becoming more and more popular in recent times. After the Nvidia and ARM deal, a recent Wall Street Journal report said, AMD is negotiating to buy rival chip maker Xilinx. According to people close to the incident, the deal could be worth more than $ 30 billion.

This source said, this deal may come to an agreement as soon as next week. However, there is no guarantee that the two sides will achieve anything, especially given the previous negotiations had to stop.

AMD is currently having its most glorious time in more than 10 years when the company’s stock has risen 89% year-to-date and is reaching a market cap of over $ 100 billion. This is due to rising demand for the company’s PCs, game consoles and many other devices that use chips. Furthermore, AMD’s data center chip business is also gaining market share against longtime rival Intel.

With the acquisition of Xilinx, AMD will look like “more wings” by increasing its competitiveness with Intel and gaining a larger position in the rapidly growing telecommunications and defense equipment market today.

Xilinx chips are currently being used in wireless communications equipment, data centers and industries such as automobiles and space missiles. Even so, the US-China trade tension is hurting the company as Huawei, the customer of 6% to 8% of the company’s revenue, is restricted from buying technology from the US.

This San Jose, California company makes microships called field-programmable gate arrays (FPGAs). Unlike conventional chips, they can be reprogrammed after being manufactured. That makes them very valuable for rapid prototyping technologies as well as many other emerging technologies, as developers cannot spend years developing chips for their own technology.

Currently, FPGA chips are mainly used for 5G telecommunications infrastructure, but it is possible that they will be replaced by standard dedicated chips as the technology matures. They are also commonly used in military radar and communications systems.

Intel is currently the dominant player in the FPGA chip market, after acquiring Altera Corp in 2015. So, if it comes to fruition, this deal will put AMD on a different front. , with FPGA chips. AMD currently accounts for about 20% of the CPU market share for PCs, while 3 years ago their market share was only about 8%.

Refer to WSJ