49 billion dollars. That’s the amount AMD invested last week in its acquisition of Xilinx, a California-based semiconductor giant that initially specialized in programmable SoCs, but is now very diversified. This acquisition allows AMD’s market capitalization to soar to $198 billion, surpassing that of its rival Intel ($193.70 billion as of February 17). A first in the history of both companies.
This increase in AMD’s valuation is also the consequence of a number of shares that has greatly inflated following the purchase of Xilinx: 1,628 billion compared to approximately 1,200 billion previously.
AMD and Intel’s valuation is still far from approaching that of Nvidia
However, with this new valuation, investors’ expectations are also revised upwards towards Lisa Su’s company. As underlined by the specialized site Guru3D, the purchase of Xilinx gives hope for a greater potential of growth thanks to a more marked diversification.
It must be said that until now AMD was mainly specialized in the design of processors and graphics cards for laptops, desktops and servers. Remember that on the x86 CPU market (AMD’s core business) the firm only has about a third of the market share. The rest is controlled by Intel, says Guru3D.
For AMD, the whole issue of buying Xilinx is therefore to expand the field of possibilities … and to establish itself on other sectors. Getting its hands on Xilinx is therefore a smart move by AMD. It is indeed a manufacturer who touches everything.
The brand has been able to establish itself in the sectors of 5G equipment, the Internet of Things, but also in the field of technologies dedicated to autonomous vehicles. Xilinx also has a strong presence in the embedded chips and devices sector, as well as in the networking devices market. These are all areas in which AMD will now be present, at least indirectly.
Note that it is this drive towards diversification that has allowed Nvidia to reach its current market capitalization, estimated at 662 billion dollars. AMD and Intel are far from it. As a reminder, the GPU giant has invested in the field of AI and neural networks, two high-growth sectors.