Advanced micro devices Inc.
AMD -0.21%
Rival chip maker Zilinks is in advanced talks to buy Inc.,
XLNX 0.15%
According to people familiar with the matter, the deal, valued at more than 30 30 billion, is the latest addition to the rapidly consolidating semiconductor industry.
The companies are discussing deals that could come together next week, people said. There is no guarantee that they will get there, especially given the people who spoke, recently the talks stalled before resuming.
AMD’s market value now tops 100 100 billion due to the demand for coronavirus epidemic stocks for PM, gaming consoles and other devices using the company’s chips. AMD said second-quarter revenue rose 26% to 1. 1.93 billion, while net revenue more than quadrupled to record માં 157 million behind notebook and server-processor sales, AMD said.
The increase in AMD stocks allows the company to make acquisitions using its shares as currency. Xilinks has a market value of about અ 26 billion, its share has risen about 9% so far this year, ahead of the S&P 500’s 7% growth.
With a typical takeover premium, the deal would value the company more than 30 30 billion.
Operated by Lisa Sue, AMD chief executive, based in Santa Clara, California. In addition to desktop and notebook computers, it makes use of components used in gaming systems such as the Xbox One and PlayStation, forcing epidemics to stay at home. It also has a growing business of data-center-processors that are rivals of Intel Corpo.
INTC 1.33%
, The dominant player in the field.
The addition of Zeilinks, led by CEO Victor Peng, will put AMD on a more competitive footing with Intel and give it a bigger foothold in the fast-growing telecommunications and defense markets.
San Jose, California.-based Xilinks chips are used in industries such as wireless communications, data centers and industries such as tomatics and aerospace. Its shares were bought by U.S. And trade tensions between China and China have been strained, and security concerns have led the Trump administration to limit shipments to China’s Huawei Technologies Co. Analysts estimate that Huawei accounted for about 6% to 8% of Zilinks’ revenue.
Xilinks create microchips called field-programmable gate arrays or FPGA. Unlike standard chips, they can be reprogrammed once they are generated. It makes them valuable in fast prototyping and fast emerging technologies where other chips do not have enough time to go through the years-long development process required.
FPG is commonly used in the new superfast 5G telecommunications infrastructure, although it can be replaced by standard chips once the technology is more mature. They are also often used in military communications and radar systems.
Intel FPG is another major player in the market, building its business in 2015 by acquiring Ultra Corp.
AMD, which specializes in central processing units serving as the digital brain of computers, has been gaining a stake in Intel in recent years, releasing new pay generations of processors that matched or outperformed many of its big competitors on the performance benchmark. According to Mercury Research, AMD’s personal computer CPU accounted for about 20% in the second quarter, up from about 8% three years ago.
To support the growing number of everyday items connected to the Internet, chip makers are expanding their product portfolios and integrating into the semiconductor industry. Xilinks, for one, has considered a number of potential tie-ups in recent years that have not paid off.
If AMD and Zilinks reach an agreement, the three biggest deals so far this year will be in the semiconductor industry, according to Delogic data. Analog devices Inc.
Maxim agreed to pay more than 20 billion for integrated products in July Inc.
And Nvidia Corpo.
In September, the British chip designer, backed by the Softbank Group, agreed to pay 40 40 billion for Arm Holdings. Corpo.
According to del alog logic, global and U.S. Mergers and acquisitions activity in 2020 has generally been sluggish as a result of the epidemic, with a decline of 18% and 40%, respectively. More recently, however, it has shown signs of life, as companies gain confidence in making big strategic moves. NextEra Energy Reza Inc.
Recently approached Duke Energy Corpo.
With the takeover proposal, which would probably value the North Carolina utility more than 60 60 billion and be considered the biggest deal of the year.
That activity has confused predictions that with the upcoming election, bargaining makers will sit on their hands and wait for clarification on what kind of administration is likely to call a shot for the next four years.
-Asa Fitch contributed to this article.
Write to [email protected] on cara lombardo and [email protected] on dana similuka
Copyright Pirate 20 2020 Dow Jones & Co., Inc. All rights reserved. 87990cbe856818d5eddac44c7b1cdeb8
.
