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Jiwei network news, on Valentine's Day in 2022, AMD and Xilinx successfully married.
From the announcement of the share swap agreement between the two parties in October 2020 to the final completion of the transaction last week, this heavyweight merger in the semiconductor industry lasted nearly 500 days and was delayed for a while, until the end of January this year, When China's State Administration for Market Regulation announced conditional approval and released the AMD acquisition, this huge merger and acquisition transaction finally crossed the last major regulatory node. With the rise of Xilinx's stock price during this period, the scale of mergers and acquisitions has reached nearly 50 billion US dollars, surpassing the Avago-Broadcom merger and acquisition, creating a new record for mergers and acquisitions in the semiconductor industry.
(Xilinx CEO Peng Mingbo took over the AMD blouse, pictured from Su Zifeng's social media account)
AMD, which has always given people the impression of cutting and cutting in foreign acquisitions for more than a decade, has shocked the world with the boldness of this shot, and for AMD itself, it is also the most daring M&A bet since the acquisition of ATI in 2006.
Looking back at 2006, with the K8 architecture that turned out to be a success, AMD has risen rapidly in the CPU market for several years, and its market share is almost ready to catch up with Intel. And the $5.6 billion consideration to acquire ATI, but also let it win the largest share of the GPU market at that time, holding two very "capable" business lines, AMD continues to rise beyond Intel one day, it seems to be close at hand.
However, the good times are not long, AMD has high hopes for a new generation of "bulldozer" CPU architecture, too aggressive architectural design and crotch manufacturing process led to a variety of product conditions, Intel launched the Core 2 that year, re-opened the gap with AMD technology and experience; AMD-ATI flagship product HD 2900 XT, but also quickly compared by NVIDIA 8800, NVIDIA has since thrown off ATI, in the GPU market a ride.
(After more than a decade, AMD has once again returned to the "sprint position" of the summit)
After the dramatic market changes this year, AMD's upward momentum suffered a sharp setback, revenue stagnated, and even shrank to $3.9 billion in 2015, and the stock price fell from a 2006 high of $40 to less than $2 in 2015, just one step away from junk stocks.
After Su Zifeng took the helm of AMD, with the ZEN processor architecture and advanced foundry process of the restart, the product strength returned to the first-line level, and once again posed a substantial challenge to Intel's market share. Coincidentally, under the smooth business situation, AMD also launched a large-scale strategic merger and acquisition as in 2006.
From excellence to excellence, what are the prospects for AMD's second big gamble?
The value of Xilinx
Founded in 1969 AMD, has gone through more than fifty years of development history, the ancient cloud "fifty and know the destiny", as a commercial organization OFD, in recent years has gradually shown the maturity of technology and business strategy, this merger and acquisition, and the acquisition of ATI there are many differences, Xilinx can bring the technical value, much clearer.
From a technical perspective, Xilinx will bring at least two major values to AMD:
First, strengthen the development capabilities of AMD heterogeneous processors.
In fact, in a written statement announcing the closing of the deal, Su has made it clear that "the acquisition of Xilinx brings together a range of highly complementary products, customers and markets, as well as differentiated IP and world-class talent."
Incorporating into the Xilinx IP Reserve and Design Team will bring amD valuable knowledge and experience in heterogeneous processor design in addition to licensing fee cost savings.
DPU is the stage representative of such heterogeneous processor products.
Today's data center server clusters often require 30% of the CPU cycles to be spent on the management network, which is equivalent to one in every three servers for networking. The DPU concept created by NVIDIA, or similar concepts such as IPU launched by Intel, are aimed at this huge pain point commonly known as "computing power tax", as the CPU's load reduction engine, which transfers a large number of transactional links such as encryption and decryption, communication processing RPC, protocol conversion, compression and so on to the DPU, releasing cpu or GPU computing power to support upper-level applications, improving the efficiency of the entire computing system, and reducing the total cost of ownership (TCO) of the data center. Its huge value of cost reduction and efficiency increase has been fully demonstrated through the Catalyst project deployed on Microsoft Azure.
(Xilinx SmartNIC products, integrating FPGAs and CPU processors)
It is worth mentioning that the acceleration card in Microsoft's Catalyst project is based on the FPGA (field programmable logic array) processor, and Xilinx is the deserved leader in the FPGA market.
Another value that is rarely mentioned in the media is Xilinx's experience in mass production of advanced process products.
Xilinx's deep-ploughed FPGA products, because of the large number of repetitive gate circuit array structures, are very suitable for identifying faults and defects in the manufacturing process, process analysis and improvement, so it is particularly conducive to the foundry in the early stage of new process introduction of capacity and yield climbing, can be called the "whetstone" of the foundry's advanced process. This makes there a particularly close cooperation ecology between FPGA design companies and foundries, which are often willing to reserve initial production capacity for FPGA products in order to improve the process and benefit other CMOS product manufacturing. FPGA design companies often reserve specialized manufacturing process talents. According to Xilinx's recollection, during its cooperation with UMC, UMC headquarters had a whole floor office with a Xilinx team.
AMD ships have ballast stones
As mentioned above, the acquisition of Xilinx, which brings clear value in processor design and manufacturing capabilities, is tantamount to a "big pill" for AMD, and also directly forms a new business opportunity.
Compared with the desktop consumer processors that have been saturated with penetration and have been trapped in the stock game, the data center is an incremental market where Intel, AMD, NVIDIA and even Qualcomm, Amazon and other manufacturers have high hopes, and the future space has a high degree of certainty, which can be called a place where soldiers must compete. AMD Dragon (EPYC) server CPU, although the architecture and performance have caught up with Intel, but in the typical B-end market such as data centers, it is not a day's work to break through the barriers of Intel's business ecosystem. Acceleration card products such as DPU, which have been mentioned above, may become an opportunity for AMD to accelerate its penetration of this market.
On the other hand, embedded computing for IoT devices is also an imaginative market at the edge and on the end side, and former Xilinx CEO Victor Peng joins AMD as president of the newly formed Adaptive and Embedded Computing Business Group (AECG), which also clearly shows interest in the embedded market.
In the embedded device market, AMD and Xilinx's MPUGPUFPGA products will form a broad combination space to adapt to the power consumption and computing performance requirements of different devices. In such an enterprise-level business that is particularly tested and precipitated, Xilinx's customer resources in aerospace, automotive, defense and health care industries accumulated over the decades are of great value to the new AMD, winning it the "admission ticket" of many high-barrier market segments such as avionics and vehicle power.
(Total TAM estimate of each business after the merger of AMD and Xilinx)
If we say that the acquisition of ATI in 2006 reflects the immaturity of AMD's strategic decisions at that time, products for the same consumer group have not formed the synergy they expected. Then this time the Xilinx acquisition, in the choice of the target, reflects the maturity of AMD today, aside from Xilinx technology and customer resources and AMD's existing business "chemical reaction", even from a purely financial point of view, focusing on the enterprise market, the operation of Xilinx, will also bring a piece of rapidly changing C-end business after the merger of AMD, revenue and profit "ballast stone", to help the company in the rise of the voyage, steady and far-reaching. (Proofreading/Aaron)