The Anti-Monopoly Bureau of China's State Administration for Market Regulation announced on the 27th that it approved the acquisition of FPGA giant Xilinx by processor giant AMD for $35 billion under restrictive conditions.
The additional restrictive conditions for China's conditional approval of AMD's acquisition of Xilinx are to require both parties to the transaction and the centralized entity to perform the following obligations:
1. WHEN SELLING AMD'S CPUS, GPUs and XILINX FPGAs to the China market, it may not be forced to be bundled in any way, or any other unreasonable trading conditions may be attached. Nor shall it prevent or restrict customers from purchasing or using the above products alone, nor shall it discriminate against customers who purchase the above products alone in terms of service level, price, software function, etc.
2. On the basis of existing cooperation with enterprises in China, further promote relevant cooperation, and continue to supply AMD CPUs, GPUs, Xilinx FPGAs and related software and accessories to the Chinese domestic market in accordance with the principles of fairness, reasonableness and non-discrimination.
3. Ensure the flexibility and programmability of Xilinx FPGAs, continue to develop and ensure the availability of Xilinx's FPGA product family, and ensure that they are developed in a manner that is compatible with ARM-based processors and in line with Xilinx's pre-transaction plans.
4. Continue to ensure interoperability of AMD's CPUs, GPUs, Xilinx FPGAs and third-party CPUs, GPUs and FPGAs for the domestic market in China. These interoperability levels are not lower than those of AMD's CPUs, GPUs, and Xilinx FPGAs. Data, features, and samples related to the interoperability upgrade should be provided to third-party CPUs, GPUs, and FPGAs within 90 days of the upgrade.
5. Protect the data of third-party CPUs, GPUs, and FPGAs, and enter into confidentiality agreements with third-party CPUs, GPU, and FPGA manufacturers. Store confidential information from third-party CPU, GPU, and FPGA manufacturers in separate and disparate hardware systems.
After 6 years from the effective date of the above obligations, the centralized entity may apply to the State Administration for Market Regulation to lift the behavioral conditions.
On October 27, 2020, AMD announced a $35 billion acquisition of FPGA giant Xilinx, which will be acquired using AMD's shares. After the merger, AMD CEO Su Zifeng will continue to serve as CEO of the combined company, and Xilinx CEO Victor Peng will join the new company as president. At that time, at least two Xilinx executives will also join the AMD management team. The combined company is expected to have up to 13,000 engineers and technicians, and the combined annual R&D expenditure will also reach $2.7 billion.
Just before China approved the merger, antitrust agencies in the United Kingdom, the United States, the European Union and other countries had approved AMD's acquisition of Xilinx. Therefore, China's conditional approval of the transaction also means that the transaction is about to be successfully completed. According to market analysis, after AMD's successful acquisition of Xilinx, Xilinx's FPGAs can form a complete high-performance computing system with AMD's existing CPU processors, GPU graphics cards, and accelerated computing cards, and have the competitive strength with Intel, NVIDIA in the data center and other markets. In the past, Intel also spent $16.7 billion in 2015 to acquire another FPGA vendor, Altera. As for NVIDIA, it plans to acquire IP company ARM for $40 billion. However, NVIDIA's acquisition of Arm has encountered a bottleneck.