AMD acquires Xilinx to address approximately $135 billion market opportunity

AMD announces the fulfillment of its acquisition of Xilinx in an all-stock transaction. Initially revealed on October 27, 2020, the purchase assembles the industry's high-performance and adaptive computing leader with the exceptionally vast scale and the most substantial leadership portfolio in computing, graphics, and adaptive SoC products.

AMD anticipates the purchase of Xilinx to be accretive to non-GAAP margins, non-GAAP EPS, and free cash flow generation within the first year.

The acquisition of Xilinx brings together a highly complementary set of products, customers, and markets combined with differentiated IP and world-class talent to create the industry’s high-performance and adaptive computing leader. Xilinx offers industry-leading FPGAs, adaptive SoCs, AI engines, and software expertise that enable AMD to offer the strongest portfolio of high-performance and adaptive computing solutions in the industry and capture a larger share of the approximately $135 billion market opportunity we see across cloud, edge and intelligent devices.

— Dr. Lisa Su, President and CEO, AMD

Today Xilinx joins @AMD, creating the industry’s high-performance and adaptive computing leader. We remain committed to providing quality innovations to our customers and partners.

— AMD Embedded (@AMDembedded) February 14, 2022

Victor Peng, the former CEO of Xilinx, will join AMD as president of the newly created Adaptive and Embedded Computing Group (AECG). AECG will continue to focus on remaining the industry leader for FPGA, Adaptive SoC, and software roadmaps, currently with the different scale of Xilinx and the capability to deliver a comprehensive collection of solutions, including AMD CPUs and GPUs.

The rapid expansion of connected devices and data-intensive applications with embedded AI is driving the growing demand for highly efficient and adaptive high-performance computing solutions. Bringing AMD and Xilinx together will accelerate our ability to define this new era of computing by providing the most comprehensive portfolio of adaptive computing platforms capable of powering a wide range of intelligent applications.

— Victor Peng

At the close of the acquisition, Xilinx stockholders received 1.7234 shares of AMD common stock and cash in place of any fractional shares of AMD common stock for each share of Xilinx common stock. Xilinx common stock will no longer be listed for trading on the NASDAQ stock market.

Benefits of the acquisition of Xilinx by AMD:

AMD will deliver differentiated solutions for cloud, edge, and intelligent end devices while taking a leadership position accelerating a diverse set of emerging workloads, from AI to intelligent networking and software-defined infrastructure.

Provides significantly expanded R&D scale further to strengthen AMD's technical capabilities and long-term product roadmaps.

Expands AMD capabilities in advanced technology development, including leadership, die stacking and packaging technology, chiplet and interconnect technology, AI and domain-specific architectures, and best-of-breed software platforms.

AMD provides solutions for the world's most important markets and customers, with a combined TAM of approximately $135 billion in 2023.

Xilinx's deep strategic partnerships across wired and wireless communications, automotive, industrial and test, aerospace and defense, and measurement and emulation markets complement AMD partnerships in PC and data center markets.

Xilinx further strengthens AMD financial model, supplying a diverse set of end markets based on long product cycles across multiple, high-margin businesses.

The transaction is expected to be accretive to non-GAAP gross and operating margins, non-GAAP EPS, and free cash flow generation in the first year.

Over the next decade, high-performance computing will be at the center of nearly every major trend shaping the future. Whether in the cloud, at the edge, or across the growing number of intelligent end devices — there is an increasing need to push the envelope to enable new experiences and services. While CPUs and GPUs will remain critical engines for those devices, in a world where algorithms are always advancing and new standards are continually emerging, we see demand growing for adaptive computing capabilities that will be critical to accelerate these emerging and evolving workloads.

Patrick Moorhead, tech industry analyst by ARInsights & Apollo Research and Owner, Founder, CEO & Chief Analyst at Moor Insights & Strategy, shares insights on his Twitter about this new $49B acquisition.

One of the biggest surprises in my discussion with @AMD CEO @LisaSu was that we should see the first AMD processor with Xilinx #AI IP in 2023. $AMD

— Patrick Moorhead (@PatrickMoorhead) February 14, 2022

Source: AMD, Patrick Moorhead