This could be a record year for consolidation in the chip sector. deals would top $100bn for the first time if amd buys xilinx for a reported $30bn, according to bloomberg numbers.
Whats driving mergers is big companies in the sector taking advantage of share price gains to position themselves to take advantage of the development of new markets such as 5g and the internet of things, as well as seeking to capitalise on greater internet use by supplying chips for data centre servers.
Nvidias $40bn acquisition of semiconductor designer arm has been the big deal of the year (although it is facing stiff opposition), but amds move is towards a significant expansion of its areas of expertise in processors and graphics components for computers and game consoles. xilinx specialises in software-changeable field programmable gate arrays (fpgas) rather than standard microprocessors and it sells wireless chips to the telecoms industry.
The data centre angle comes from combining amds strength in this area with a push into the business by xilinx with its fpgas. they would compete better with intel and nvidia, which pumped up its data centre offering when it completed its $7bn acquisition of mellanox earlier this year.
But ubs analysts have reservations about amds pursuit of xilinx. they say the target is not bringing much of an ecosystem to the table for data centres and a combined run rate of around $500m a year is still far behind nvidias $6.5bn and intels $26bn for their data centre businesses. we find it hard to believethatxlnx can materially alter amd's data center trajectory for the better, their research note concludes.
Investors seem unimpressed as well. amd shares, which have almost doubled in value this year to give it a market cap of around $100bn, are down 4 per cent currently on news of a deal as early as next week. xilinx shares have risen 12 per cent today.
1. twitter tightens us election policiestwitter says it will block retweets of misleading content from candidates ahead of the us presidential election. the further update of its policies today means users will have to click through a warning that covers the misleading tweet in order to see it, and will no longer be able to like, retweet it or reply to it.
2. turkeys fleet of armed dronesnagorno-karabakh is the fifth foreign conflict zone where turkish drones have been deployed in recent years, with the countrys unmanned aerial vehicles (uavs) also taking to the skies in syria, libya, northern iraq and the eastern mediterranean. the expanding turkish drone industry is the culmination of a two-decade drive to boost defence production and reduce reliance on the west.
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Jonathan margolis has a round-up of exceptional devices that can digitally stream your music. he includes the astell&kern sr25 portable music player (649), naims 1,299 black box music player, ifi aurora an inventively designed bamboo and aluminium player for 1,399, the 999 ruark r5 and the top-priced 2,199 nad m10 bluos pictured above.