FPGA now means Finally, PRC Grants Approval: China OKs AMD's $35bn Xilinx buy

hurdles <= hurdles - 1;


Chip megadeals have become daunting, with governments looking at transactions suspiciously, though AMD can breathe a sigh of relief: the path to acquire FPGA giant Xilinx is now clearer.

The National Anti-Monopoly Policy Bureau of the State Administration for Market Regulation of the People's Republic of China has approved the $35bn all-stock takeover that was announced in October 2020, according to an 8-K filing [PDF] by AMD with the US Securities and Exchange Commission.

In late December, AMD said it had to delay closing the deal as China's regulators were still reviewing the proposal. The US and EU have already approved the acquisition; AMD now expects the merger to close in the first quarter of 2022 thanks to the Middle Kingdom's approval.

Chip deals are increasingly being tied to geopolitics, with semiconductors wedged in a battle between nations to get ahead on technology. China in 2018 did not approve Qualcomm's $44bn acquisition of NXP, which killed the deal. That takeover's cancellation was seen as retaliation by China for Uncle Sam targeting Chinese companies including Huawei and ZTE.

Governments seem unified in opposing Nvidia's $40bn buyout of Arm. Nvidia is seemingly prepared to walk away from the deal, with watchdogs concerned about the buyout stifling competition, and also interested in the implications on national security.

Chip merger and acquisition activity dried up last year after reaching record highs in 2020. Semiconductor acquisitions totaled $117bn in 2020, but was only $22bn through the first eight months of 2021, according to IC Insights.

AMD will boost its chip offerings for data centers and network edge applications with Xilinx, which designs FPGAs. Intel bought FPGA slinger Altera for $16.7bn in 2015, and that deal now seems like a discount.

FPGAs are valued in the build-out of networks and 5G infrastructure. The open-slate and easy software upgradability of FPGAs makes them valuable at the network edge. FPGAs are also used for artificial intelligence and embedded electronics. ®

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