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AMD already has the green light to buy Xilinx

AMD can now buy Xilinx, after all the regulatory entities that have examined the purchase agreement have given their approval to the operation. Those of the United States and China have given the green light to the agreement, since they have verified that it does not violate any regulations, especially in terms of competition. Thus, the operation, perhaps the longest to close of all those that AMD has undertaken and for which it has had to wait longer than expected since it was announced last October 2020, will probably close next week. Specifically, next February 14.

Ultimately, AMD will pay for Xilinx $54 billion, according to Tom’s Hardware, when the initial deal was for $35 billion in stock, due to the rise in AMD’s share price. When the deal was announced, it was said that Xilinx shareholders would receive 1.7234 AMD shares for each Xilinx share (the purchase agreement stated that payment of the company’s purchase price would be all in shares). From then until now, AMD stock has risen from around $85 in October 2020 to more than $130 today, a 53% gain.

Xilinx is specialized in a different type of chips than those that AMD has used to build its brand, more focused on chips for CPUs and GPUs. Specific, Xilinx produces programmable semiconductorsamong which are the FPGA’s (Field Programmable Gate Array) and ASICs (application specific integrated circuit). These chips are used in a large number of industrial applications, and having ownership of the company that produces them would help AMD expand into new markets and develop types of chips that it hasn’t produced before.

Furthermore, these chips are used in data centers, along with chips for CPUs and GPUs. Therefore, AMD will now be able to offer more complete solutions to its customers. In addition, this purchase will allow AMD to tighten with respect to its main competitor, Intel, which bought Xilinx’s main rival in the FPGA sector in 2015. Xilinx, yes, was one of the first companies that changed to a model of business of not having its own factories to develop its chips. Xilinx designs them, but they are made by others.

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