Due to the semiconductor crisis, companies like Intel and AMD are in a race to acquire chip manufacturers from across the globe to increase their production power. Recently, Advanced Micro Devices, Inc (AMD) acquired the designer of the programmable device Xilinx Corporation. The acquisition was given greenlit by the United Kingdom’s Competiton and Markets Authority (CMA) as part of its investigation, which kicked off earlier this year.
The investigation was concluded at the close of last month and the body stated that the acquisition will not harm the competition. Yesterday the investigation body released its detailed decision publicly and explained the reasons behind its belief that the deal will not harm either AMD or Xilinx’s competitors.
The investigation primarily focused on the sale of central processing units (CPUs) by AMD and the sale of field-programmable gate arrays (FPGAs) by Xilinx. The investigation targeted the sales on data center and embedded CPUs by AMD and datacenter and embedded FPGAs sold by Xilinx.
The CMA then started its analysis of Xilinx’s strong market share in the FPGA market and also investigated whether due to the merger, its customers were to be forced to purchase an AMD datacenter CPU with a Xilinx FPGA. To conclude the investigation body interviewed data center companies and it reached the conclusion that the purchase of a CPU holds a higher importance than an FPGA for their products.
After the interviews, the CMA concluded that if AMD and Xilinx were to bundle their FPGAs and CPUs, they will lose the FPGA sales since a potential customer will not respond well if they are forced to chose the CPU.
The one-third party raised concerns that the Merged Entity could, by leveraging its position in the supply of Datacentre CPUs, foreclose rival suppliers of SmartNICs through offering a combination of Datacentre FPGAs and Datacentre CPUs to customers that the third-party suggested might otherwise combine a Datacentre CPU with a SmartNIC. However, as noted above, the CMA does not believe the Merged Entity would have the ability or incentive to use its Datacentre CPU position to foreclose Datacentre FPGA suppliers given its small position in the supply of Datacentre CPUs. The CMA, therefore, does not believe that the Merged Entity would have the ability or incentive to use its Datacentre CPU position to foreclose SmartNIC suppliers.
For now, the regulatory authorities in Europe, the U.K., and the U.S. have given their go-ahead for Xilinx’s acquisition. AMD is lastly waiting to receive a green flag from the Chinese authorities.
