Snakes and Ladders

1 min read

With news that Chinese regulators have granted approval for Advanced Micro Devices’ (AMD) acquisition of Xilinx, the way has now been cleared for one of the largest deals seen in the global semiconductor industry.

The approval of the $35 billion deal to buy Xilinx, a leader in adaptive computing, looks set to create a high-performance computing behemoth. AMD’s CEO Lisa Su has spoken of the combined business as bringing together ‘world-class engineering teams’ and ‘deep domain expertise’, to create an industry leader with the vision, talent and scale to define the future of high-performance computing.

The acquisition brings together complementary product portfolios and customers with AMD providing high performance processor technologies, including CPUs, GPUs, FPGAs, and adaptive SoCs.

The combined company will look to target key growth segments which include the likes of data centres, PCs, communications, gaming, automotive, industrial, aerospace and defence.

While this deal appears to be heading for a successful conclusion another, that of Nvidia’s planned acquisition of ARM for $40 billion, has been abandoned.

Nvidia had been preparing to bail on its purchase of the UK chip designer Arm for some time, due to its struggles to win regulatory approval. As a consequence, Arm’s chief executive Simon Segars has stepped down and will be replaced by Rene Haas, who most recently served as president of IP at Arm.

SoftBank is now stepping up preparations for an Arm initial public offering as an alternative to the Nvidia takeover.

The deal had faced a backlash from regulators and the chip industry, including many of Arm’s own customers, who feared that Nvidia would become too powerful if it gained control over Arm’s chip designs.

The acquisition faced resistance from regulators in the US, China and in the UK, where the government ordered an in-depth investigation at the end of last year.

The US authorities, in the form of the FTC, said that allowing the acquisition would stifle “innovative next-generation technologies” and would “unfairly undermine” Nvidia’s competitors with it becoming, as Qualcomm argued, the ‘gatekeeper’ for Arm’s technology.

Where next then for Arm? Many of the other big players in this space, Apple has been mentioned as a possible buyer, would face the same regulatory scrutiny as Nvidia and while many will approve of Arm retaining its independence will it be able to maintain its current dominant position in the market?

Could we end up seeing a consortium of interested parties looking to purchase Arm?

It could work but what a regulatory and political challenge that would be.