The AMD acquisition of Xilinx is certainly big news but as an insider looking at the media coverage I think there are a few more points to consider. While most of the coverage has been positive there will always be negatives and we can look at that as well.
Intel acquired Altera in 2015 for $16.7B at a 50% premium which was a major disruption for the FPGA industry. Altera and Xilinx were in a heated battle for manufacturing supremacy when Xilinx joined Altera at TSMC for 28nm and beat Altera to first Silicon. Altera responded by moving manufacturing to Intel at 14nm which resulted in Intel acquiring Altera. Looking back, it was a great move which provided Intel with a larger cloud footprint. Rumors of a Xilinx acquisition swirled afterwards but a 50%+ price premium was expected and the motivation on either side was not strong enough.
AMD and Intel are also in a heated battle for manufacturing supremacy. With AMD’s move to TSMC at 7nm the battle has shifted in AMD’s favor. Based on the latest investor calls AMD is in a very strong position against Intel for 7nm and 5nm products. Xilinx also reported a great quarter with beats at the top and bottom line with the Data Center Group hitting record revenue, up 23% Q/Q and logging 30% annual growth. This is another one of those 1+1=3 acquisitions.
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