AMD makes huge $35bn acquisition

Chip maker looks to bolster presence in the datacentre space

AMD has acquired datacentre-focused chip manufacturer Xilinx in a deal worth $35bn.

AMD will use its stock to cover the whole value of the deal, creating what it says is "the industry's leading high-performance computing company".

Lisa Su, CEO at AMD, said: "Our acquisition of Xilinx marks the next leg in our journey to establish AMD as the industry's high-performance computing leader and partner of choice for the largest and most important technology companies in the world.

"This is truly a compelling combination that will create significant value for all stakeholders, including AMD and Xilinx shareholders who will benefit from the future growth and upside potential of the combined company.

"By combining our world-class engineering teams and deep domain expertise, we will create an industry leader with the vision, talent and scale to define the future of high-performance computing."

The combined business will have over 13,000 engineers, AMD added, with an annual R&D investment of $2.7bn.

The announcement came as AMD reported its Q3 earnings, with sales up 56 per cent year on year to $2.8bn for the period ending 26 September.

CEO Su attributed the sales growth to increasing demand in the PC, gaming and datacentre arenas.

Net income was up 129 per cent to $501m, as AMD's relentless surge continues.

A period of intense growth has seen the firm's valuation rise by over 360 per cent since the start of 2019, partly due to Intel's supply issues.

The acquisition of Xilinx is the latest in a string of blockbuster acquisitions in the chip space.

Nvidia is set to acquire ARM for $40bn; Analog Devices announced its $20bn deal for Maxim Integrated Products in July; while Intel is flogging its memory business to SK Hynix for $9bn.

The Xilinx transaction is expected to close by the end of next year.