AMD’s Xilinx Acquisition Secures Regulatory Clearance Crucial For Closure

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Chip designer Advanced Micro Devices Inc's (AMD) planned acquisition of Xilinx Corporation has been approved by the United Kingdom's Competition and Markets Authority (CMA). The CMA announced in May that it was investigating the deal, and as June comes to an end, the regulator has found no reason to object to the acquisition. British laws evaluate a merger based on whether it will harm existing business, the country's national security and other areas. The CMA's detailed rationale for clearing the acquisition will be available soon, it announced today as part of its approval.

AMD's Xilinx Acquisition Clearns British Regulatory Scrutiny And Awaits Go-Ahead From European Commission

Today's approval comes after the waiting period for the United States Federal Trade Commission (FTC) expired earlier this year, implying that the regulators could not determine any outcomes from the del that would violate American laws. Today's CMA approval also gives the go-ahead for the deal, with the regulatory authority simply outlining that it has "cleared the anticipated acquisition by Advanced Micro Devices, Inc. of Xilinx, Inc."

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In its May announcement, the CMA outlined that it will evaluate the deal under Section 96 2(A) of the U.K.'s 2002 Enterprise Act. This section authorizes the body to ensure that any planned or proposed merger follows the Enterprise Act and that the CMA has verified the relevant details for the deal.

AMD has also submitted its Xilinx acquisition plans to the European Commission to gain the body's approval for the European Union hopefully. The provisional deadline for the commission to evaluate the deal will expire at the end of this month, and if the deal is approved, then all eyes will be on China for providing it with the final approval.

The Xilinx Spartan-3 FPGA is visible on an XCM-001-400 printed circuit board (PCB).

Should its plans to acquire Xilinx succeed, AMD will expand its presence in the competing market. The company currently designs processors and other equipment for several use cases such as personal computing, data centers and gaming consoles. With Xilinx under its roof, AMD will be able to expand this presence to new sectors such as telecommunications, which are expected to grow as fifth-generation (5G) cellular networks become common in the United States and all over the world.

In an interview given last month, AMD's chief executive officer Dr. Lisa Su highlighted some of these new use cases by stating that:

Yes. The telco market is a very interesting SAM opportunity for us. I mean you would say that we really haven't had that as a key market for us in the past. I think the strength of the portfolio, I think, overall, does say that this should be a key market segment for us in the future. I think the addition of Xilinx as well, because of their very strong presence in the comms infrastructure market, I think it's good news. It adds sort of relevance to both the CPU and the FPGA solutions together. I think we view this as a key opportunity for us to continue to get the EPYC capabilities over a larger range of customers. So a key opportunity for us. Yes, we're looking forward to more engagement in the telco space and certainly with the Xilinx acquisition, having more exposure to the 5G and other end markets that we currently don't have a lot of exposure to.

As the CMA gives AMD the go-ahead, it is also evaluating another American chip designer, NVIDIA Corporation's planned takeover of British chip design house Arm Ltd. This deal is receiving tighter scrutiny than AMD's proposal due to Arm's ubiquity in the tech ecosystem.

As part of its announcement that it was commencing an investigation of the deal in April, the CMA outlined that the U.K.'s Secretary of State for Digital, Culture, Media and Sport, Mr. Oliver Dowden, had asked it to determine whether it went against British national security. This reference was made under the Enterprise Act, which enables the Secretary to determine whether several interests such as news presentation and freedom of speech, financial system stability and public health considerations can be violated in the aftermath of a potential merger.

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