Reports from the Heart of the Machine
Edit: Shanshan
In order to be invincible in the round of reshuffling in the semiconductor industry, more and more giants have begun to warm up.
On January 27, the Anti-Monopoly Bureau of the State Administration for Market Regulation issued an announcement that since January 19, 2021, after receiving the anti-monopoly declaration for the acquisition of xilinx equity by Chaowei Semiconductor (AMD), after one year, after the applicant had supplemented the application materials, the case was filed, and after review, the State Administration for Market Regulation decided to attach restrictive conditions to approve the case.
Earlier, regulators in the US, Europe and the UK have also approved the acquisition. If AMD can successfully incorporate Xilinx into its own umbrella, it will be a huge opportunity for both parties and will open up a new pattern for global competition in the semiconductor field.
1, the giants huddled together for warmth
In order to be invincible in the round of reshuffling in the semiconductor industry, more and more giants have begun to warm up. In October 2020, AMD announced its intention to acquire all of Xilinx's shares in a $35 billion share exchange.
AMD was incorporated in the United States in 1969, is the world's leading microprocessor manufacturers, in 1979, 2015 respectively listed on the New York Stock Exchange, NASDAQ Stock Exchange, its CPU, GPU, motherboard chipset and other products cover computers, communications and consumer electronics and other fields.
Xilinx was incorporated in the United States in 1984, is the world's largest manufacturer of programmable chips (FPGAs), listed on the NASDAQ Stock Exchange in 1989, its FPGA chips, software design tools and other products also cover artificial intelligence, data centers and autonomous driving and other fields.
AMD's acquisition of Xilinx is a win-win outcome for both parties, accelerating Xilinx's transformation into areas such as data centers and diversifying AMD's product portfolio to complement each other's industrial footprint and technology advantages.
According to market research firm IC Insights, AMD revenue in 2021 increased by 65% year-on-year to about $16.1 billion, while Xilinx's 2021 revenue exceeded $3 billion (less than 4 billion), and the combination of the two will enter the world's top ten semiconductor companies, ranking about ninth, behind Qualcomm, Nvidia and Broadcom, which belong to the same chip design industry.
The State Administration for Market Regulation said that after evaluation, it believes that the commitment plan with additional restrictive conditions submitted by the reporting party can reduce the adverse impact of the M&A transaction on market competition, so it has decided to allow amD and Xilinx's merger case with additional restrictive conditions.
Specifically, the parties to the transaction and the centralized entity are required to perform the following obligations: when selling ultra-micro CPUs, ultra-micro GPUs and Xilinx FPGAs to the domestic market in China, they shall not force the tying in any way, or attach any other unreasonable transaction conditions; they shall not hinder or restrict customers from purchasing or using the above products alone; and they shall not discriminate against customers who purchase the above products alone in terms of service standards, prices, software functions, etc.
Previously, regulators in the United States, Europe and the United Kingdom have also approved the acquisition. The State Administration for Market Regulation conditionally approved AMD's acquisition of Xilinx, clearing the way for one of the largest deals in the global semiconductor industry.
Under the acquisition agreement, upon completion of the transaction, AMD shareholders will own 74% of the combined company and Xilinx shareholders will own the remaining 26%. AMD President and CEO Lisa Su will continue to serve as CEO of the acquired company, and Xilinx President and CEO Victor Peng will join AMD as President, responsible for Xilinx's business and strategic growth initiatives. It is reported that the new company will have up to 13,000 engineers and technicians, with a combined annual investment of $2.7 billion in research and development.
2. The FPGA competitive landscape is changing
In fact, AMD's acquisition of Xilinx is the same as Intel, the world's largest desktop and server processor manufacturer, acquired Altera, the world's second largest FPGA vendor, in 2015.
With the increasing complexity of data center applications, under the trend of software-defined systems, programmable logic deviceS FPGAs play an increasing role in building data center systems, and the combination of server processors and FPGAs makes it easier to achieve the advantages of performance and flexibility in data center applications.
FPGAs, or field-programmable gate array chips, as the name suggests, give developers more flexible development space, so they are widely used in many cutting-edge technology fields from consumer electronics to data centers to 5G communications, as well as unmanned vehicles.
Although the market size of the FPGA itself is not large, it is the key to 5G communications, data centers, unmanned driving, defense and many other hundreds of billions of dollars in the market.
With the current progress of the 5G era and the speed of AI advancement, the global FPGA market size has grown steadily in recent years, and according to the forecast of Market Research Future, the global FPGA global market size is expected to reach about $12.521 billion in 2025.
According to Market Research Future, the world's largest FPGA market in 2018 is the Asia-Pacific region, because most of the future growth of the downstream data center, 5G and artificial intelligence markets will be concentrated in the Asia-Pacific region, and the Asia-Pacific region will also grow the fastest in terms of FPGA demand. By 2025, the Asia-Pacific share of the global FPGA market is expected to continue to increase to 43.94%. Among them, the Chinese market is the most important component and growth engine of the Asia-Pacific market.
Currently, the FPGA market is dominated by Xilinx and Intel. In 2015, Intel acquired Altera for $16.7 billion, selling the latter's FPGA products with its own CPU to replace Nvidia's GPUs.
This acquisition will not only help Xilinx to gain an edge in the competition with Intel, but also equip AMD with more ammunition in the data center market. After the completion of the acquisition, AMD will have both CPU+GPU and CPU+FPGA product portfolios to directly strengthen the core competitiveness in the data center field, and use this to more extensively contact customers in industrial, automotive and other industries, and further compete for market share from Intel.
The semiconductor market has been undergoing industry consolidation over the past few years. Intel, Broadcom, Qualcomm and other industry giants are making large acquisitions to strategically lay out for future business. However, due to the impact of global anti-monopoly regulatory policies, mergers and acquisitions are becoming increasingly difficult.
At present, Nvidia's $40 billion acquisition of British chip company ARM is under close scrutiny by regulators in the United States, the United Kingdom, Europe and other countries.
Source:
https://www.samr.gov.cn/fldj/tzgg/ftjpz/202201/t20220127_339441.html
https://www.reuters.com/article/china-samr-amd-xilinx-0127-idCNKBS2K110F
https://ir.amd.com/news-events/press-releases/detail/1037/amd-and-xilinx-provide-update-regarding-expected-timing-of
http://pdf.dfcfw.com/pdf/H3_AP202010121420802615_1.pdf
https://www.pingwest.com/a/221247
https://www.reuters.com/companies/AMD.O