US chip vendor AMD has acquired fellow semiconductor player Xilinx for around $50 billion, in what it describes as the largest ever merger in the sector.

AMD, which primarily produces CPUs for PCS and servers, put in the bid in October 2020 for Xilinx, which has more direct relevance to the telecoms sector. It invented the FPGA (field-programmable gate array) chip which is supposed to have specialised potential in 5G installations, and launched the Zynq RFSoC DFE radio platform, designed for 5G NR applications.

The initial bid was for $35 billion back in 2020. But Xilinx is a publicly traded company and the value has gone up significantly since then to around $50 billion. Following regulatory approval from Chinese government, the purchase will now go through. Former Xilinx CEO Victor Peng will join AMD as president of a new division it’s calling the Adaptive and Embedded Computing Group (AECG), where the fruits of the merger will apparently play out.

“The acquisition of Xilinx brings together a highly complementary set of products, customers and markets combined with differentiated IP and world-class talent to create the industry’s high-performance and adaptive computing leader,” said AMD CEO Dr Lisa Su. “Xilinx offers industry-leading FPGAs, adaptive SoCs, AI engines and software expertise that enable AMD to offer the strongest portfolio of high-performance and adaptive computing solutions in the industry and capture a larger share of the approximately $135 billion market opportunity we see across cloud, edge and intelligent devices.”

Peng added: “The rapid expansion of connected devices and data-intensive applications with embedded AI are driving the growing demand for highly efficient and adaptive high-performance computing solutions,” said Victor Peng. “Bringing AMD and Xilinx together will accelerate our ability to define this new era of computing by providing the most comprehensive portfolio of adaptive computing platforms capable of powering a wide range of intelligent applications.”

AMD’s only significant rival in the x86 PC and server CPU space is Intel, who today also made an acquisition in the shape of Tower Semiconductor for the more modest sum of $5.4 billion. So there’s clearly a bit of market consolidation going on within the chip space, which may or may not be accelerated by some of the disruption in supply chains it’s been experiencing. Regardless, the purchase of Xilinx is bound to put AMD in greater contact with the telecoms sector.