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On the evening of October 27, the chip company AMD announced on its official website that it had reached a final agreement to acquire Xilinx in a $35 billion all-stock transaction. , the most important technology companies.

On the evening of October 27, the chip company AMD announced on its official website that it had reached a final agreement, agreeing to acquire Xilinx in an all-stock transaction of US$35 billion (about 235 billion yuan). A leader in performance computing and the world’s largest and most important technology company.

AMD officially announced the acquisition of Xilinx, how will the domestic semiconductor industry be affected

The transaction will be completed on an all-stock AMD basis. The specific plan is that each share of common stock held by Xilinx shareholders can be exchanged for 1.7 shares of AMD, which is equivalent to Xilinx’s valuation of $143 per share, which is about a 24.5% premium over Monday’s closing price of $114.55. 8%. AMD shareholders will own about 74 percent of the combined company, with Xilinx shareholders owning the remaining 26 percent. After the news was announced, Xilinx rose 11.31% before the market, with the latest market value of $28.1 billion.

AMD expects the transaction to be completed by the end of 2021. The combined company will have 13,000 engineers and spend more than $2.7 billion in R&D annually. The transaction will take about a year and is expected to be completed by the end of 2021. But the deal still needs to be approved by regulators in major markets such as China and the United States.

After the transaction is completed, AMD CEO Su Zifeng will continue to serve as the CEO of the combined company, and Xilinx President and CEO Victor Peng will be replaced as AMD President, and will continue to be responsible for Xilinx’s business and strategic growth plans. Additionally, at least two Xilinx board members will join the AMD board.

AMD officially announced the acquisition of Xilinx, how will the domestic semiconductor industry be affected

It is worth noting that if AMD, the world’s second largest CPU manufacturer, successfully acquires Xilinx, the world’s largest FPAG manufacturer, this transaction will become one of the three largest semiconductor industry transactions so far this year.

In addition, as Sino-U.S. relations continue to be tense, the U.S. government has “weaponized” chips and related technologies. The frequent mergers and acquisitions of large U.S. semiconductor companies this year will undoubtedly have an impact on domestic semiconductor companies. There will be more uncertainty.

AMD grows strongly, wants to open a new front with Intel

In fact, it is not just acquisitions, AMD also released its 2020Q3 financial report yesterday, with strong growth momentum.

AMD officially announced the acquisition of Xilinx, how will the domestic semiconductor industry be affected

In this quarter, AMD’s turnover was US$2.8 billion, a year-on-year increase of 56% and a quarter-on-quarter increase of 45%; operating income was US$449 million, a year-on-year increase of 141% and a quarter-on-quarter increase of 160%; net income was 390 million US dollars, a year-on-year increase. 225%, a month-on-month increase of 148%; gross profit margin was 44%, a year-on-year increase of 1%, showing that AMD’s growth momentum is very strong. In addition, AMD’s turnover has increased by more than 25% year-on-year for four consecutive quarters, and the customer growth momentum is quite obvious.

Unlike AMD, Xilinx (Xilinx), as the absolute king in the FPGA field, even has a certain advantage over AMD in terms of cash flow and profits. However, the acquisition is an all-stock transaction, indicating that Xilinx is also optimistic about the future development potential of the new company.

So, where is the future? data center!

As the “second millennium”, AMD performed well in the PC and gaming fields in the third quarter, and has already competed fiercely with Intel, the overlord. Now the acquisition of Xilinx (Xilinx) will also affect Intel, the current data center/server. The market leader challenges.

In the past few years, more and more Internet companies have begun to use FPGAs as hardware acceleration units in cloud data centers, such as Microsoft’s Catapult project and Alibaba Cloud’s elastic bare metal servers based on the Dragon architecture. It can be seen that FPGAs are used in cloud data centers. core values ​​are gradually emerging.

Therefore, for AMD, which has the two major technologies of X86 CPU and GPU, FPGA may become the key to unlocking a wider data center, and Xilinx has become almost the only choice in the market.

AMD officially announced the acquisition of Xilinx, how will the domestic semiconductor industry be affected

According to Zhihu user @Jakcwin, in fact, Xilinx’s current revenue is about 12% of the data center business, which is not particularly large, but Xilinx’s SmartNIC, FPGA high-performance computing and new adaptive computing ACAP are what AMD urgently needs , can help the development of AMD’s data center business. Technological integration in the data center business also determines the success or failure of this acquisition.

In addition, whether it is to package the FPGA and server chip EPYC together to solve the heat dissipation problem, plus the hardware of a good software tool chain, or to combine ACAP + CPU, or even to combine Xilinx’s Vitis and ROCm, it has become AMD’s business diversification. possible options.

However, from the perspective of the FPGA industry, the acquisition has certain risks. The FPGA market has always been a small and beautiful market, and this acquisition may accelerate the marginalization of FPGAs, thereby becoming an accessory to CPUs.

Giants are frequently purchased, and FPGAs are declining?

FPGA, Field Programmable Logic Gate Array, is a semi-custom computing architecture that is good at stream processing, with higher energy efficiency and lower latency than CPU and GPU.

Compared with the traditional mode of chip design, FPGA chips are not simply limited to research and design chips, but can be optimized for products in many fields with the help of specific chip models. From the perspective of chip devices, the FPGA itself constitutes a typical integrated circuit in a semi-custom circuit, which contains digital management Modules, embedded units, output units, and input units. On this basis, it is necessary to focus on the comprehensive chip optimization design of FPGA chips, and add new chip functions by improving the current chip design, thereby realizing the simplification of the overall structure of the chip and the improvement of performance.

AMD officially announced the acquisition of Xilinx, how will the domestic semiconductor industry be affected

In terms of market size, according to data released by the Semiconductor Industry Association (SIA), the global semiconductor industry sales in 2019 were $412.1 billion. Among them, according to MRFR statistics, in 2018, the global FPGA market size gradually increased to 6.335 billion US dollars. According to the compound annual growth rate of about 10%, in 2019, the global FPGA market size is about 7 billion US dollars. It can be seen that the FPGA market can only account for less than 2% of the entire semiconductor market.

However, although the FPGA market is not large, the threshold is unparalleled in the chip industry. More than 60 companies around the world have successively spent billions of dollars to try to climb to the top of the FPGA highlands, including Intel, IBM, Texas Instruments, Motorola, Philips, Toshiba, Samsung and other industry giants, but only the ones who succeeded in reaching the top in the end. Four companies located in Silicon Valley: Xilinx (Xilinx), Altera (Altera), Lattice (Lattice), Microsemi (Microsemi). Among them, the two companies, Xilinx and Altera, have a total market share of nearly 90%, and Xilinx has always maintained the dominant position of the global FPGA.

Although the FPGA industry is almost monopolized by the Big Four and seems to have unlimited prospects, the Big Four have been acquired one after another.

Altera (Altera): In December 2015, Altera, the world’s second largest FPGA manufacturer, was acquired by chip giant Intel for $16.7 billion, the largest acquisition in Intel’s history.

Lattice (Lattice): In April 2016, Tsinghua Unigroup announced the acquisition of 6.07% of Lattice’s shares in the open market, causing Lattice’s stock price to surge 18%; on November 3, 2016, Lattice announced that it would accept Chinese-backed Canyon Bridge The $1.3 billion acquisition, but later, because of the obstruction of the US government, Canyon Bridge was sued in court.

Microsemi: On March 21, 2017, Microsemi announced the closure of its manufacturing facility in Shanghai. It is expected that the official closing time of Shanghai Microsemi Semiconductor Co., Ltd. will be the end of October 2017.

Coupled with today’s Xilinx (Xilinx), almost all the Big Four have acquired experience. Although Lattice (Lattice) ultimately failed to acquire, but the four giants lost three, and had to doubt the future of the FPGA industry. Of course, after this acquisition, FPGA has been unable to complete its biggest ambition: to program the entire embedded system.

However, in a certain sense, being acquired also means value. Driven by the two-wheel drive of 5G and AI, new application scenarios put forward higher requirements on the computing power of chips. FPGA adapts to this change by performing data parallel and task parallel computing at the same time, thus attracting market attention. For giant companies in the semiconductor field, the acquisition of FPGA companies can also quickly make up for their shortcomings in the market.

But it is undeniable that even if the giant FPGA manufacturers are acquired, their influence on the market is still there. For example, Altera, which was acquired by Intel, still ranks second in the industry. After acquiring Altera, Intel established a new business unit, the Programmable Solutions Group. In addition to strengthening the existing FPGA business, the Programmable Solutions Division will also work closely with Intel’s Data Center Division and the Internet of Things Division to launch the next generation of highly customized integrated products and solutions, which in a sense also promotes the development of FPGAs. develop.

From the relevant data, the scale of the overall FPGA market will continue to expand year by year, and the growth of the market will also maintain a compound annual growth rate of about 10%. In recent years, with the development of 5G, AI and other industries, future growth The rate forecast will even exceed 10%.

What will be the impact on China?

After AMD acquires Xilinx, there will be three giants in the US chip field, namely: Intel+Altera, NVIDIA+ARM, AMD+Xilinx. If all mergers and acquisitions can be achieved, the resources of the semiconductor industry will be further concentrated, and the semiconductor market may enter the monopoly of the three giants. This will somewhat put pressure on China’s semiconductor industry.

However, China has been one of the largest chip consumer markets, and by 2030, China’s chip consumption is expected to reach 40% of the world’s. According to policy requirements, the domestic chip self-sufficiency rate will reach 70% by 2025. From this perspective, although international giants continue to promote industry mergers and acquisitions, domestic chip manufacturers still have enough room to survive.

For domestic FPGA companies, undertaking localization needs and meeting the needs of differentiated scenarios will also be the main market direction in the future.

At present, there are already a large number of relatively young companies in China, including Ziguang Tongchuang, Gaoyun Semiconductor, Anlu Technology, Jingwei Qili, Fudan Microelectronics, Zhiduoji, and AGM, which can mainly cover some low-end and middle-end enterprises. market.

However, as the FPGA giants are integrated one after another, their development direction will inevitably move closer to the high-end direction of the combination of FPGA+CPU, which also gives opportunities for domestic FPGA companies that focus on the mid-to-low-end market.

write at the end

In fact, the current CEO of Xilinx, Victor Pengde, and AMD are also quite related and dramatic.

When Victor Pengde worked at ATI, ATI was acquired by AMD, and then Pengde became the corporate vice president of Silicon Engineering Applications of the Graphics Product Group (GPG) at AMD, responsible for AMD graphics, console games, CPU chipsets and consumer businesses; 2008 Years later, Victor Pengde started working at Xilinx and has been CEO, and then Xilinx was acquired by AMD.

In any case, the integration of AMD and Xilinx can be described as a powerful combination, which will inevitably set off a storm in the international semiconductor field.

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