Light Reading
Acquisition strategies don't work for everyone, but chipmaker Xilinx appears to have devised an M&A plan that has paid off.

Xilinx: An 'All Programmable' Strategy

Carolyn Mathas
News Analysis
Carolyn Mathas
4/3/2014
50%
50%

Acquisition strategies don't work for everyone, but there are always exceptions: Chipmaker Xilinx looks to be a member of that select group.

Like Altera Corp. (Nasdaq: ALTR), which we looked at previously, Xilinx Inc. (Nasdaq: XLNX) has used its check book to further its strategy of providing systems vendors with a one-stop-shop for communications logic in optical transport, traffic management, packet processing, and high-speed Ethernet segments. (See The M&A Way to Achieve 400G Goals.)

The component pieces of Xilinx's one-stop-shop have been put together through a series of acquisitions, along with the company's core programmable logic technology. The result is a complete portfolio for service provider, enterprise, and data center markets.

Anyone who has experienced or studied corporate takeovers, or been closely involved in M&A activities, knows that acquisitions are not without pain for both parties. Given the breakneck speed at which Xilinx acquired its capabilities, especially during the past few years, it would appear the company has perfected an M&A formula that includes targeting the companies that have already provided it with market differentiation, and which are already familiar to Xilinx on a cultural as well as technological level.

The approach appears to have paid off. In its most recently reported financial quarter (ended December 28, 2013), the company reported a 15% year-on-year increase in revenues to $587 million and a 70% increase in net income to $176 million. The company's share price has risen by 50% in the past year to $54.64, giving the chipmaker a market valuation of $14.6 billion.

Let's look at the company's acquisition history, and what that has delivered.

RocketChips
RocketChips, acquired in October 2000, provided ultra-high-speed CMOS mixed-signal transceivers serving the networking, wireless and wired telecommunications, and enterprise storage markets. RocketChips' solutions included serial backplane transceivers (single and quad 3.125Gbit/s transceivers), telecom transceivers (SONET OC-48 and OC-192), enterprise storage transceivers (Fibre channel, Ethernet), and networking transceivers (Gigabit Ethernet, 10G Ethernet, and Infiniband).

Triscend
Xilinx waited until March of 2004 to go shopping again, purchasing Triscend, a provider of configurable embedded microcontroller (MCU) technology. Triscend's single-chip platform featured FastChip development software that delivered a ready-to-customize SoC (system on chip) integrated circuit with the flexibility of a field-programmable device, at the price of a standard product and no non-recurring engineering costs.

AutoESL Design Technologies
With the purchase of AutoESL Design Technologies in January 2011, Xilinx entered a fast-and-furious acquisition phase. AutoESL Design Technologies expanded the market for FPGAs to those designing at a higher level of abstraction using C, C++ and System C. By April 2012, the results were visible when Xilinx unveiled a C-based toolset redesign for programmable systems, the Vivado Design Suite. This IP and system software supported high-capacity devices, enabling faster integration and implementation for programmable systems into devices with 3D stacked silicon interconnect technology, ARM processing systems, analog mixed signal (AMS), and many semiconductor intellectual property (IP) cores.

Omiino
Two months later, in March 2011 as part of the Xilinx roadmap for support of FPGA-based line card designs for 100G and future 400G optical transport network (OTN) applications, Xilinx purchased IP-rich Omiino. As a result, Xilinx rapidly unveiled Virtex-6 HXT FPGA capabilities for 100G OTU4 OTN designs, eased transition from the 40-nm Virtex-6 to the more capable 28-nm Virtex-7 for 400G OTN and beyond, and shored up in-house OTN expertise. (See Xilinx Acquires Omiino, Demos 100G.)

Sarance Technologies
Sarance, considered a leader in MAC (media access control) and the Interlaken interconnect protocol, delivered a very configurable, highly-FPGA-optimized portfolio of chip-to-chip interconnects with a focus on the Ethernet, Interlaken, and network search engine segments. Xilinx purchased the company in March 2011 and was rewarded with the ability to more rapidly displace ASSPs and ASICs for 40G/100G and beyond. According to Xilinx, Sarance technology had the only IP technology capable of scaling to 400G rates for bridging in an FPGA. (See Xilinx Acquires Sarence.)

Modelware
The Xilinx purchase in May 2011 of IP vendor Modelware, a provider of traffic management/packet processing silicon intellectual property (IP) cores, rapidly showed traction as the company simultaneously unveiled FPGA-based 100G traffic management reference designs based on its Virtex-6 HTX FPGA. The management IP was aimed at mobile backhaul, PON aggregation, and data center applications. The highly integrated solutions helped Xilinx equipment-makers ramp up for the high bandwidth-granular services rollouts. It also became clear that Xilinx was going for a one-stop shop strategy for high-speed networks. (See Xilinx Acquires Modelware for 100G and Chipmakers Snack on Optical Designs.)

PetaLogix
In August 2012, the acquisition of PetaLogix, an embedded Linux solutions provider, enabled Xilinx to strengthen the company's position in the embedded market. Pre-acquisition, PetaLogix distributed Linux solutions for various processors such as MicroBlaze and PowerPC. Post-acquisition, it provided Linux solutions to the Zynq-7000 All Programmable SoC.

Modesat Communications
Xilinx purchased Modesat Communications, a high-performance wireless backhaul solutions provider, in September 2012. Modesat specialized in backhaul modem solutions for microwave, E-band and non-line of sight (NLOS) markets. Mobile backhaul platforms could now use Xilinx All Programmable 7 series FPGAs and Zynq-7000 SoCs in combination with Modesat wireless backhaul solutions. Customers could keep their proprietary IP and leverage the backhaul solutions and the flexibility of the Xilinx FPGAs and SoC devices, and so get to market faster. (See Xilinx Buys Into Backhaul.)

When the dust settled…
So, what does this M&A strategy mean and how do all these deals fit together?

According to Steve Glaser, SVP of corporate strategy at Xilinx, the company has "transformed itself from a supplier of programmable logic to what we call 'all programmable', with a focus on enabling ever-more integrated hardware, software and I/O programmable devices for smarter and more flexible networks and systems. This has driven a number of developments and acquisitions, including ARM-based SoCs, multi-die 3D ICs, next-generation design tools and methodologies, and a portfolio of SmartCORE hardware IP and key embedded software IP."

He continued: "The impact of this all-programmable portfolio on next-generation systems is most visible in communications, including OTN, SDN, data center appliances, wireless radios, and wireless backhaul," added Glaser. "However, Xilinx is also enabling smarter systems across a wide range of applications that include automotive driver assistance, industrial machine vision, machine-to-machine communications and connected control, software-defined radios, and smart energy."

An example of how this is playing out was the company's presence at this year's OFC, where Xilinx unveiled OTN reference designs that, the company says, give its customers the industry's only single-chip solution for 4x100G OTN transponders and 2x100G OTN switching apps. The reference designs, in combination with Xilinx All Programmable 3D ICs and SmartCORE IP, represent an evaluation platform that is fully featured for high-bandwidth OTN apps.

The reference designs are available, and feature:

  • A 4x100G Transponder in a single Virtex-7 1140T 3D IC reference design, which is based on what Xilinx claims is the world's first single-chip 400G solution. The 4x100G Transponder design features a common control plane to manage the four 100G streams, each supporting GFEC with statistics, an overhead processor for section, path and tandem connection monitoring, and an easy-to-use GUI for defects and performance metrics evaluation.

  • The 2x 100G OTN Switching on a single Virtex-7 1140T 3D IC reference design showcases three Xilinx SmartCORE IP cores including a 100G single-stage multiplexer/demultiplexer, an Optical Internetworking Forum (OIF) compliant 100G segmentation and reassembly (SAR), and a 100G bi-directional IP block used to perform overhead insertion and extraction on up to 80 channels. The SmartCORE IP cores enable designers to construct a single-chip 2x100G MuxMapSAR for metro OTN and Packet Optical Transport systems (POTS).

    At the Embedded World event, just before OFC, Xilinx unveiled its UltraScale multi-processing (MP) architecture for next-gen Zynq UltraScale MPSoCs, extending the company's ASIC-class UltraScale FPGA and 3D IC architecture. The MPSoC architecture delivers processor scalability from 32 to 64 bits supporting virtualization, soft and hard engines for real time control and graphics/video processing, waveform and packet processing, next-gen coherent interconnect and memory, and advanced power management.

    Also at OFC, Huawei Technologies Co. Ltd. and Xilinx demonstrated a prototype 400GigE core router. Based on Xilinx's high-end FPGA, this is the first prototype system to validate 400GigE MAC/FEC/PCS/PMA technology. The Huawei core router architecture is system-ready for 400GigE interfaces.

    Industry standards for 400GigE are not yet in place, but the demonstration platform is designed to show how the marketplace will address the anticipated impact on network capacity of the Internet of Things (IoT), when up to 50 billion intelligent devices and approximately 300 billion passive "things" are ultimately expected to be connected to Internet infrastructure.

    The race to deliver 400G capabilities has begun in earnest, and Xilinx is right there in the leading pack. And it couldn't have got there without its M&A strategy.

    — Carolyn Mathas, contributing editor, special to Light Reading

    (6)  | 
    Comment  | 
    Print  | 
  • Newest First  |  Oldest First  |  Threaded View
    CMathas
    100%
    0%
    CMathas,
    User Rank: Blogger
    4/8/2014 | 4:06:22 AM
    Re: That is impressive...
    Glad you enjoyed both pieces. Thanks for taking the time out to comment! Given that these two companies have led their respective lives neck and neck made the piece more interestimg to do.
    CMathas
    50%
    50%
    CMathas,
    User Rank: Blogger
    4/8/2014 | 4:04:25 AM
    Re: Integrating acquisitions
    No kidding! Remember early on when Cisco bought everything in sight? What a mess that must have been to integrate.
    DOShea
    50%
    50%
    DOShea,
    User Rank: Blogger
    4/7/2014 | 9:17:39 PM
    Integrating acquisitions
    That's an incredible amount to absron and integrate. If this company is doing that smoothly, then it is doing better than most companies with multiple buyouts under their belts.
    mdraz
    50%
    50%
    mdraz,
    User Rank: Light Beer
    4/7/2014 | 2:27:01 PM
    Re: That is impressive...
    Great article. Between this and previous week's, "The M&A Way to Achieve 400G Goals," you're deep-diving into an area that few are covering, and fewer still are covering well or in an interesting way. For me, the impact different types of deals and financing have on the industry's growth today is fascinating and hits on many core issues that directly impact progress and innovation of technologies.
    CMathas
    100%
    0%
    CMathas,
    User Rank: Blogger
    4/3/2014 | 2:49:51 PM
    Re: That is impressive...
    Thanks Ray. They've been very busy and it's nice to see when strategy becomes so clear...

     
    Ray@LR
    100%
    0%
    Ray@LR,
    User Rank: Blogger
    4/3/2014 | 1:59:49 PM
    That is impressive...
    That is quite the roster -- and this article brings it into perspective.

    A very interesting read!!
    Flash Poll
    Wagner’s Ring
    Data Centers Drive Telcos Into the Future

    8|28|14   |   2:20   |   (2) comments


    Data centers are at the heart of key trends driving telecom -- network virtualization, the drive for increased agility, and the need to compete with OTT providers.
    LRTV Custom TV
    Why SPs Should Consider Cisco's EPN

    8|27|14   |   5:40   |   (0) comments


    Sultan Dawood from Cisco discusses Cisco's EPN, which enables SPs to build agile and programmable networks delivering new network virtualized services using Cisco's Evolved Services Platform (ESP).
    LRTV Huawei Video Resource Center
    Huawei’s Showcase @ Big Telecom Event 2014

    8|26|14   |   2.56   |   (0) comments


    SoftCOM is Huawei's framework for telecom business and network transformation. Haofei Liu, Solution Marketing Manager, Carrier Business Group, Huawei, showcases Huawei's SoftCOM architecture in this video.
    LRTV Huawei Video Resource Center
    Huawei @ BTE 2014: Director of Integrated Solutions on SoftCOM & NFV Monetization

    8|26|14   |   4.43   |   (0) comments


    Libin Dai, Director of Integrated Solutions, Carrier Business Group, discusses Huawei's SoftCOM and NFV monetization. Huawei believes that NFV monetization should be service-driven rather than network-driven, and that operators should have network transformation, service transformation and a compatible and collaborative ecosystem in place in order to deploy NFV.
    LRTV Huawei Video Resource Center
    Huawei @ BTE 2014: Director of US NFV Lab on CloudEdge & the Future of NFV

    8|26|14   |   4.06   |   (0) comments


    Sean Chen, Director of US NFV Lab at Huawei, discusses Huawei's new approach to NFV in open collaboration. Huawei believes that through Proof of Concept tests, it could help operators learn and communicate with the industry more effectively. Sean believes that successful implementation of NFV should have its values reaching to end users and discusses how Huawei's ...
    LRTV Huawei Video Resource Center
    Huawei's Highlights @ Big Telecom Event 2014

    8|26|14   |   3.34   |   (0) comments


    At the Big Telecom Event in Chicago Huawei showcases its high-level strategy, the SoftCOM architecture, which helps operators reduce the cost of ownership of their network infrastructure and generate additional revenue in the ICT service environment. Huawei showcases over 30 pilot programs from across the globe, focusing on the industry-leading commercial ...
    LRTV Custom TV
    VeEX – Live from the Show

    8|21|14   |   5:58   |   (0) comments


    An overview of VeEX Test and Measurement solutions including TX300S multi-service test set with VeExpress cloud-based management system, UX400 universal modular platform supporting 100G testing, and the redesigned RXT modular platform.
    LRTV Custom TV
    Transitioning CE 2.0 Networks Into the SDN & NFV Era With Telco Systems

    8|19|14   |   5:19   |   (0) comments


    Telco Systems' Ariel Efrati (CEO) and Moshe Shimon (VP of Product Management) discuss virtualization and how the company's new Open Metro Edge solution utilizes the SDN and NFV concepts to accelerate and orchestrate service delivery through its innovative product portfolio and software applications.
    LRTV Custom TV
    NFV Myths: Is NFV Still Several Years Away?

    8|11|14   |   1:13   |   (0) comments


    Some say that NFV (network functions virtualization) is still several years away from being implemented on mobile operator networks. This isn't the case. Operators can get started on their paths to NFV now, as this short video from Skyfire shows.
    LRTV Custom TV
    A New Security Paradigm in SDN/NFV

    7|28|14   |   02:54   |   (0) comments


    Paul Shaneck, Global Director Network Solutions for Symantec, discusses the evolving virtualized network, explaining how Symantec is leading the security discussion as it relates to SDN and NFV, and helping to ensure the network is protected and compliant.
    LRTV Documentaries
    Sprint's Network Evolution

    7|24|14   |   14:59   |   (0) comments


    Sprint's Jay Bluhm gives a keynote speech at the Big Telecom Event (BTE) about Sprint's network and services evolution strategy, including Spark.
    LRTV Documentaries
    BTE Keynote: The Software-Defined Operator

    7|24|14   |   18:43   |   (1) comment


    Deutsche Telekom's Axel Clauberg explains the concept of the software-defined operator to the Big Telecom Event (BTE) crowd.
    Upcoming Live Events!!
    September 16, 2014, Santa Clara, CA
    September 16, 2014, Santa Clara, CA
    September 23, 2014, Denver, CO
    October 29, 2014, New York City
    November 6, 2014, Santa Clara
    November 11, 2014, Atlanta, GA
    December 9-10, 2014, Reykjavik, Iceland
    June 9-10, 2015, Chicago, IL
    Infographics
    A survey conducted by Vasona Networks suggests that 72% of mobile users expect good performance all the time, and they'll blame the network operator when it's not up to par.
    Hot Topics
    Rogers, Shaw Take Aim at Netflix
    Mari Silbey, Independent Technology Editor, 8/26/2014
    Utilities to Pump $11.2B Into Smart Grid – Study
    Jason Meyers, Senior Editor, Utility Communications/IoT, 8/26/2014
    Verizon Launches QR Code Security Solution
    Carol Wilson, Editor-at-large, 8/26/2014
    Fiber Revival at Deutsche Telekom
    Iain Morris, 8/25/2014
    M2M's In Fashion: Wearables Play the US Open
    Sarah Reedy, Senior Editor, 8/25/2014
    Like Us on Facebook
    Twitter Feed