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Source: iStock

AMD is a semiconductor company

AMD May Buy Xilinx in a Deal Valued Over $30 Billion

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Microchip maker Advanced Micro Devices or AMD is in talks to buy rival chipmaker Xilinx. The companies haven't reached an agreement. Id there is a deal, it will likely be over $30 billion, accord to a report from The Wall Street Journal.  

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AMD and Xilinx news

AMD has experienced an 89 percent surge in 2020. The demand for PCs, gaming consoles, and related items increased due to stay-at-home orders amid the COVID-19 pandemic. AMD's market value is over $100 billion, according to the report from The Wall Street Journal.

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Source: iStock

Gaming equipment

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Dr. Lisa Su is the president and CEO of AMD. The company is a leader in the semiconductor industry. AMD makes desktop and notebook computers as well as components for gaming systems. Also, AMD competes with Intel in the data center processor business.  

Xilinx, which is headed by CEO Victor Peng, manufactures microchips called field-programmable gate arrays, or FPGAs, according to The Wall Street Journal. Unlike standard chips that can't be reprogrammed, Xilinx’s microchips are reprogrammable even after production. The chips are used in wireless communications, data centers, and industries like automotive and aerospace. 

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The Wall Street Journal also said, “FPGAs are commonly used in new superfast 5G telecommunications infrastructure, although they may be replaced later by standard chips once the technology is more mature. They are also often used in military communications and radar systems.” 

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Source: istock
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Xilinx acquisition

“Consolidation has swept through the semiconductor industry as chipmakers seek scale and expand their product portfolios to support the increasing number of everyday items that are connected to the internet,” The Wall Street Journal reported. 

Xilinx is valued at $26 billion with shares up about 9 percent in 2020. The company has considered tie-ins in previous years that “didn’t come to fruition,” according to The Wall Street Journal.  

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If AMD and Xilinx reach an agreement, the acquisition could increase AMD’s competitive edge in the telecommunications market. The deal would also mean that the top three acquisitions in 2020 took place in the semiconductor industry.  

Xilinx would provide value by offering AMD “more of the pieces needed to break Intel Corp’s stranglehold on the profitable market for data-center computer components,” as reported by Yahoo Finance

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Source: AMD

What is AMD's stock price today?

AMD stock was down after the news about the potential acquisition and closed at $86.51 Oct. 8. In pre-market trading on Friday, Oct. 9, the stock was at $83.79 as of 9:03 a.m. ET.  

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What is Xilinx's stock price today?

Xilinx stock has experienced the negative effects of U.S. sanctions against Chinese Huawei Technologies, according to CNBC.  

Earlier in 2020, the company’s returns were around 5 percent, according to TNW. The shares increased 17 percent in pre-market trading on Oct. 9. Xilinx was on track to open at the “highest level seen during regular-session hours since July 2019,” as reported by MarketWatch 

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Xilinx shares closed at $105.99 Oct. 8 and were at $123.76 in pre-market trading as of 8:45 a.m. ET on Oct. 9.  

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Source: istock

What is Intel stock price today?

Intel, the other major player in the FPGA market, acquired Altera in 2015. 

Intel closed at $53.37 Oct. 8. The pre-market trading shares were priced at $53.23 as of 8:46 a.m. ET on Oct. 9.  

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