AMD Is Said in Talks to Buy Rival Xilinx in $30 Billion Deal, , on October 9, 2020 at 8:37 am

Financial News
By
On October 9, 2020
In Financial News
Tags:

(Bloomberg) — Advanced Micro Devices Inc. is in advanced discussions to buy Xilinx Inc. in a takeover that could be valued at $30 billion, according to people familiar with the matter.The deal could come together as early as next week, though things remain in flux, the people said, asking not to be identified discussing a private deal.A combination with Xilinx would give AMD Chief Executive Officer Lisa Su more of the pieces needed to break Intel Corp.’s stranglehold on the profitable market for data-center computer components. It would follow moves by rival Nvidia Corp., which bought Mellanox Technologies Ltd. and aims to use its pending acquisition of Arm Ltd. to grab more of that business.Acquiring Xilinx, which makes programmable chips for wireless networks, would also help AMD expand into a new market just as telecommunications carriers spend billions to build fifth-generation, or 5G, networks.Read more: Watch Chip Stocks Again on NXP Beat, AMD-Xilinx Takeover ReportWhat Bloomberg Intelligence SaysAMD’s interest in Xilinx is both a shield and a sword against Intel’s diverse data-center computing assets, Nvidia’s GPUs, Mellanox’s assets and its potential purchase of U.K.-based Arm. Xilinx’s FPGAs would expand AMD’s computing variety, widening its CPU and GPU capability into AI and networking. The deal may also be financially accretive.- Anand Srinivasan and Marina Girgis, analystsClick here for the research.A Xilinx takeover furthers an industry consolidation that’s quickened in 2020. Deal activity in the chip sector has surged this year, including Nvidia’s proposed $40 billion purchase of Arm. With both of the possible acquisitions, the value of pending or completed semiconductor deals in 2020 would top $100 billion, the highest in at least 10 years, according to data compiled by Bloomberg.Xilinx, based in San Jose, California, makes field programmable gate arrays, or FPGAs. That kind of chip is unique because its function can be altered by software, even after it’s been installed in a piece of machinery. Xilinx’s chips have historically been used in telecommunications equipment, but under CEO Victor Peng the company is expanding into products targeted at data centers — where FPGAs can be used to accelerate workloads such as artificial intelligence. The other major supplier of advanced FPGAs is Intel, which acquired its market position through the purchase of Altera Corp. in 2015.Representatives for AMD and Xilinx declined to comment on the negotiations, which the Wall Street Journal first reported.Xilinx shares rose 16% in pre-market trading in New York on Friday, while AMD shares fell 2.6%. Xilinx closed at $105.99 on Thursday, at the time giving it a market capitalization of $25.9 billion, about a quarter of AMD’s value. Shares of Santa Clara, California-based AMD closed at $86.51. The stock has almost doubled this year.Under Su, who took the helm in 2014, AMD has surged back from the brink of failure. It’s made gains against longtime rival Intel in desktop computer processors and laptops. The company is also working to reverse its fortunes in the server business, where chips can cost as much as a small car. For years, Intel had relegated AMD to less than 1% of that market.AMD’s interest in Xilinx reflects the increasing demands of cloud-services providers such as Amazon.com Inc. and Alphabet Inc.’s Google. Those companies are spending heavily on new data centers to meet the surge in demand for computing power delivered via the internet. They’re also racing to enhance services, such as search, with artificial intelligence software, and many companies are experimenting with building their own hardware to do so. That’s putting greater pressure on chip providers to advance their offerings.AMD-Xilinx Combo Helps Cloud Diversify From Intel, Nvidia: ReactFor AMD investors, how the company intends to finance the deal may prove crucial in persuading them to sign off. The chipmaker has only recently shed concerns about its cash reserves and was haunted by debt incurred from a takeover of graphics chipmaker ATI Technologies in 2006. At the end of its most-recent quarter, AMD had cash and equivalents of $1.8 billion, less than several other chipmakers.Nvidia is using stock to partially fund its purchase of Arm, while Analog Devices Inc.’s acquisition of Maxim Integrated Products Inc. is an all-stock deal. That partly reflects a huge run-up in the value of chip companies in recent years, lead by AMD and Nvidia.Xilinx shares have not rallied as much. The stock is up 8% this year compared with a gain of 27% by the Philadelphia Stock Exchange Semiconductor Index. AMD has surged nearly 90%, making it the second-best performer, behind Nvidia.The approval of chip-industry transactions has been complicated by the ongoing trade war between China and the U.S. The Asian country is the biggest purchaser of chips and America is home to the biggest group of producers.(Updates with shares, chip sector deals and analyst’s comment from the fifth paragraph)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.,

AMD Is Said in Talks to Buy Rival Xilinx in $30 Billion Deal(Bloomberg) — Advanced Micro Devices Inc. is in advanced discussions to buy Xilinx Inc. in a takeover that could be valued at $30 billion, according to people familiar with the matter.The deal could come together as early as next week, though things remain in flux, the people said, asking not to be identified discussing a private deal.A combination with Xilinx would give AMD Chief Executive Officer Lisa Su more of the pieces needed to break Intel Corp.’s stranglehold on the profitable market for data-center computer components. It would follow moves by rival Nvidia Corp., which bought Mellanox Technologies Ltd. and aims to use its pending acquisition of Arm Ltd. to grab more of that business.Acquiring Xilinx, which makes programmable chips for wireless networks, would also help AMD expand into a new market just as telecommunications carriers spend billions to build fifth-generation, or 5G, networks.Read more: Watch Chip Stocks Again on NXP Beat, AMD-Xilinx Takeover ReportWhat Bloomberg Intelligence SaysAMD’s interest in Xilinx is both a shield and a sword against Intel’s diverse data-center computing assets, Nvidia’s GPUs, Mellanox’s assets and its potential purchase of U.K.-based Arm. Xilinx’s FPGAs would expand AMD’s computing variety, widening its CPU and GPU capability into AI and networking. The deal may also be financially accretive.- Anand Srinivasan and Marina Girgis, analystsClick here for the research.A Xilinx takeover furthers an industry consolidation that’s quickened in 2020. Deal activity in the chip sector has surged this year, including Nvidia’s proposed $40 billion purchase of Arm. With both of the possible acquisitions, the value of pending or completed semiconductor deals in 2020 would top $100 billion, the highest in at least 10 years, according to data compiled by Bloomberg.Xilinx, based in San Jose, California, makes field programmable gate arrays, or FPGAs. That kind of chip is unique because its function can be altered by software, even after it’s been installed in a piece of machinery. Xilinx’s chips have historically been used in telecommunications equipment, but under CEO Victor Peng the company is expanding into products targeted at data centers — where FPGAs can be used to accelerate workloads such as artificial intelligence. The other major supplier of advanced FPGAs is Intel, which acquired its market position through the purchase of Altera Corp. in 2015.Representatives for AMD and Xilinx declined to comment on the negotiations, which the Wall Street Journal first reported.Xilinx shares rose 16% in pre-market trading in New York on Friday, while AMD shares fell 2.6%. Xilinx closed at $105.99 on Thursday, at the time giving it a market capitalization of $25.9 billion, about a quarter of AMD’s value. Shares of Santa Clara, California-based AMD closed at $86.51. The stock has almost doubled this year.Under Su, who took the helm in 2014, AMD has surged back from the brink of failure. It’s made gains against longtime rival Intel in desktop computer processors and laptops. The company is also working to reverse its fortunes in the server business, where chips can cost as much as a small car. For years, Intel had relegated AMD to less than 1% of that market.AMD’s interest in Xilinx reflects the increasing demands of cloud-services providers such as Amazon.com Inc. and Alphabet Inc.’s Google. Those companies are spending heavily on new data centers to meet the surge in demand for computing power delivered via the internet. They’re also racing to enhance services, such as search, with artificial intelligence software, and many companies are experimenting with building their own hardware to do so. That’s putting greater pressure on chip providers to advance their offerings.AMD-Xilinx Combo Helps Cloud Diversify From Intel, Nvidia: ReactFor AMD investors, how the company intends to finance the deal may prove crucial in persuading them to sign off. The chipmaker has only recently shed concerns about its cash reserves and was haunted by debt incurred from a takeover of graphics chipmaker ATI Technologies in 2006. At the end of its most-recent quarter, AMD had cash and equivalents of $1.8 billion, less than several other chipmakers.Nvidia is using stock to partially fund its purchase of Arm, while Analog Devices Inc.’s acquisition of Maxim Integrated Products Inc. is an all-stock deal. That partly reflects a huge run-up in the value of chip companies in recent years, lead by AMD and Nvidia.Xilinx shares have not rallied as much. The stock is up 8% this year compared with a gain of 27% by the Philadelphia Stock Exchange Semiconductor Index. AMD has surged nearly 90%, making it the second-best performer, behind Nvidia.The approval of chip-industry transactions has been complicated by the ongoing trade war between China and the U.S. The Asian country is the biggest purchaser of chips and America is home to the biggest group of producers.(Updates with shares, chip sector deals and analyst’s comment from the fifth paragraph)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

,

Instant Quote

Enter the Stock Symbol.

Select the Exchange.

Select the Type of Security.

Please enter your First Name.

Please enter your Last Name.

Please enter your phone number.

Please enter your Email Address.

Please enter or select the Total Number of Shares you own.

Please enter or select the Desired Loan Amount you are seeking.

Please select the Loan Purpose.

Please select if you are an Officer/Director.

High West Capital Partners, LLC may only offer certain information to persons who are “Accredited Investors” and/or “Qualified Clients” as those terms are defined under applicable Federal Securities Laws. In order to be an “Accredited Investor” and/or a “Qualified Client”, you must meet the criteria identified in ONE OR MORE of the following categories/paragraphs numbered 1-20 below.

High West Capital Partners, LLC cannot provide you with any information regarding its Loan Programs or Investment Products unless you meet one or more of the following criteria. Furthermore, Foreign nationals who may be exempt from qualifying as a U.S. Accredited Investor are still required to meet the established criteria, in accordance with High West Capital Partners, LLC’s internal lending policies. High West Capital Partners, LLC will not provide information or lend to any individual and/or entity that does not meet one or more of the following criteria:

1) Individual with Net Worth in excess of $1.0 million. A natural person (not an entity) whose net worth, or joint net worth with his or her spouse, at the time of purchase exceeds $1,000,000 USD. (In calculating net worth, you may include your equity in personal property and real estate, including your principal residence, cash, short-term investments, stock and securities. Your inclusion of equity in personal property and real estate should be based on the fair market value of such property less debt secured by such property.)

2) Individual with $200,000 individual Annual Income. A natural person (not an entity) who had individual income of more than $200,000 in each of the preceding two calendar years, and has a reasonable expectation of reaching the same income level in the current year.

3) Individual with $300,000 Joint Annual Income. A natural person (not an entity) who had joint income with his or her spouse in excess of $300,000 in each of the preceding two calendar years, and has a reasonable expectation of reaching the same income level in the current year.

4) Corporations or Partnerships. A corporation, partnership, or similar entity that has in excess of $5 million of assets and was not formed for the specific purpose of acquiring an interest in the Corporation or Partnership.

5) Revocable Trust. A trust that is revocable by its grantors and each of whose grantors is an Accredited Investor as defined in one or more of the other categories/paragraphs numbered herein.

6) Irrevocable Trust. A trust (other than an ERISA plan) that (a)is not revocable by its grantors, (b) has in excess of $5 million of assets, (c) was not formed for the specific purpose of acquiring an interest, and (d) is directed by a person who has such knowledge and experience in financial and business matters that such person is capable of evaluating the merits and risks of an investment in the Trust.

7) IRA or Similar Benefit Plan. An IRA, Keogh or similar benefit plan that covers only a single natural person who is an Accredited Investor, as defined in one or more of the other categories/paragraphs numbered herein.

8) Participant-Directed Employee Benefit Plan Account. A participant-directed employee benefit plan investing at the direction of, and for the account of, a participant who is an Accredited Investor, as that term is defined in one or more of the other categories/paragraphs numbered herein.

9) Other ERISA Plan. An employee benefit plan within the meaning of Title I of the ERISA Act other than a participant-directed plan with total assets in excess of $5 million or for which investment decisions (including the decision to purchase an interest) are made by a bank, registered investment adviser, savings and loan association, or insurance company.

10) Government Benefit Plan. A plan established and maintained by a state, municipality, or any agency of a state or municipality, for the benefit of its employees, with total assets in excess of $5 million.

11) Non-Profit Entity. An organization described in Section 501(c)(3) of the Internal Revenue Code, as amended, with total assets in excess of $5 million (including endowment, annuity and life income funds), as shown by the organization’s most recent audited financial statements.

12) A bank, as defined in Section 3(a)(2) of the Securities Act (whether acting for its own account or in a fiduciary capacity).

13) A savings and loan association or similar institution, as defined in Section 3(a)(5)(A) of the Securities Act (whether acting for its own account or in a fiduciary capacity).

14) A broker-dealer registered under the Exchange Act.

15) An insurance company, as defined in Section 2(13) of the Securities Act.

16) A “business development company,” as defined in Section 2(a)(48) of the Investment Company Act.

17) A small business investment company licensed under Section 301 (c) or (d) of the Small Business Investment Act of 1958.

18) A “private business development company” as defined in Section 202(a)(22) of the Advisers Act.

19) Executive Officer or Director. A natural person who is an executive officer, director or general partner of the Partnership or the General Partner, and is an Accredited Investor as that term is defined in one or more of the categories/paragraphs numbered herein.

20) Entity Owned Entirely By Accredited Investors. A corporation, partnership, private investment company or similar entity each of whose equity owners is a natural person who is an Accredited Investor, as that term is defined in one or more of the categories/paragraphs numbered herein.

Please read the notice above and check the box below to continue.

Singapore

168 Robinson Road,
Capital Tower, Singapore 068912
+65 3105 1295

Taiwan

5th Floor, No. 1-8, Section 5, Zhongxiao East Road, Taipei

Hong Kong

R91, 3rd Floor,
Eton Tower, 8 Hysan Ave.
Causeway Bay, Hong Kong
+852 3002 4462

Australia

44 Martin Place, Sydney 2000 Australia
+02 8319 3232

Indonesia

Millennium Centennial Center, 38th Floor, Jl. Jend. Sudirman Kav. 25
Jakarta 12920, Indonesia

Market Coverage