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AMD poised to acquire Xilinx for $30B – report

Chipmaker AMD is reportedly preparing to acquire Xilinx – a major player in the 5G silicon arena – in a transaction that could be valued at up to $30 billion.

If the deal goes through – the Wall Street Journal reported that it could be finalized as early as next week – it would position AMD as a more direct competitor to Intel in the telecommunications market.

Citing unnamed sources familiar with the matter, The Wall Street Journal reported on the potential tie-up late Thursday. Xilinx's stock popped on the news – the value of the transaction would put a premium on Xilinx's $26 billion market value – while AMD's fell slightly in early trading Friday.

Xilinx sells chips to customers in several industries including many of the top equipment suppliers in the telecommunications industry. Indeed, just a few months ago Xilinx announced a major new supply agreement with Samsung around 5G. Although Xilinx has been hurt by the US government's ban on US business with China's Huawei – the largest supplier of mobile networking equipment in the world – Xilinx has said that its financial footing is beginning to improve.

AMD, meanwhile, has enjoyed share gains against Intel in personal computers in recent years, according to the WSJ. Intel, for its part, has set its sights on the market for cellular basestations and hopes to gain a leading share in the market by next year, a move that would push against the likes of Broadcom, HiSilicon, Marvell, Qualcomm and Xilinx.

Thus, a transaction between Xilinx and AMD could position AMD to expand its battle with Intel into the telecommunications sector, including in 5G.

If the AMD-Xilinx transaction is consummated, it would be the latest major shakeup in the chipset industry. For example, Nvidia is chasing a match-up with ARM while Analog Devices is buying Maxim Integrated Products.

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Mike Dano, Editorial Director, 5G & Mobile Strategies, Light Reading | @mikeddano

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