Chipmaker Advanced Micro Devices’ $35bn takeover of specialist Xilinx has come at something of a low point for the latter.
In early 2019, 5G rollout seemed poised to propel demand at the programmable chipmaker which, like AMD, is based in California. The data centre unit, supplying chips for cloud data storage companies, was growing fast. Then came the escalating US/China trade wars and problems at Huawei — a Xilinx client. Before rumours of AMD interest began, shares in Xilinx were down 22 per cent from the high point in spring 2019.
A good moment, then, for AMD to pounce. Deals in the semiconductor industry have reduced the number of potential companies to acquire. AMD wants to go beyond the market for home computers and gaming consoles to compete more directly with Intel in supplying chips to cloud computing businesses.