AMD eying Xilinx for $30 billion?

AMD has been cooperating with Xilinx for quite some time now but today's news still comes as a surprise. According to WSJ, AMD is in talks to acquire Xilinx in a deal that could be valued over $30 billion. The journal says that while the deal could still fall through, an announcement may come as soon as next week.

Advanced Micro Devices Inc. is in advanced talks to buy rival chip maker Xilinx Inc., according to people familiar with the matter, in a deal that could be valued at more than $30 billion and mark the latest big tie-up in the rapidly consolidating semiconductor industry.

By buying Xilinx, AMD would become a leader in FPGAs. Statistics from 2019 generated by Gartner show Xilinx has 51.1 percent of the FPGA market, with Intel's Altera buying the runner-up with 35.8 percent marketshare.

If a deal is reached, it would be the biggest takeover in AMD's history. AMD's largest takeover to date was the $5.4 billion acquisition of ATI in 2006. That deal saddled AMD with so much debt that the company started showing up on bankruptcy watch lists after its misfortunes in the (pre-Zen) CPU and GPU markets.

Presumably, AMD will try to finance this deal by cashing in on its sky-high stock valuation. At present, AMD is valued at $101.5 billion on the stock market. AMD had just $1.78 billion in cash and cash equivalents on its balance sheet at the end of Q2 2020.