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AMD struck a record chip maker deal with the acquisition of Xilinx for $50 billion

AMD struck a record chip maker deal with the acquisition of Xilinx for $50 billion

OAKLAND, CA, Feb. 14 (Reuters) – Semiconductor designer Advanced Micro Devices Inc (AMD)(AMD.O) On Monday, it said it has completed the acquisition of Xilinx Inc (XLNX.O) In a record deal for the chip maker estimated to be worth about $50 billion, giving it an additional edge in the major data center market.

The closing of the deal comes on the heels of Nvidia Corp(NVDA.O)The decision to abandon its plans to buy owned SoftBank (9984.T) Arm Ltd, citing regulatory hurdles.

It said the AMD deal went ahead with all necessary approvals for the acquisition.

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AMD CEO Lisa Sue told Reuters that between AMD’s processor technologies, Xilinx on chips and programmable chips, the two companies are complementary. “This has been our focus in speaking to regulatory authorities around the world,” Su said. She added that Arm was an important partner to AMD but declined to say more about Arm’s potential next steps.

The deal, announced in October 2020, was originally valued at $35 billion, but an appreciation in AMD’s stock has pushed up the price, according to AMD.

AMD shares jumped more than 4% on Monday. Other chip makers also made gains.

With the acquisition of Xilinx, Su said that AMD will be able to increase its reach in key markets such as data centers where Xilinx has a strong network and AI presence, as well as in the 5G communications, automotive, industrial, aerospace and defense markets. “These are all markets where AMD has not had a very small presence and they all need high-performance computing as well,” she said.

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AMD is ramping up its battle with Intel Corp in the data center chip market. The combined company will have more than 15,000 engineers and an entirely outsourced manufacturing strategy that relies heavily on Taiwan Semiconductor Manufacturing Co Ltd (TSMC).

The two US companies took advantage of a smarter approach to seize market share from Intel, which has struggled with in-house manufacturing problems.

AMD has long been Intel’s main competitor for CPUs in the personal computer space.

Su will lead the combined company as CEO, with Xilinx CEO Victor Ping as head of the newly formed Adaptive and Embedded Computing Group.

The two companies expect the deal to generate $300 million in cost savings.

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(Reporting by Jane Lanhei Lee) Editing by Jason Neely, Bernadette Baum and Paul Simao

Our criteria: Thomson Reuters Trust Principles.