Xilinx Buying AMD, Makes Sense?
Let’s say that Xilinx is almost ready to buy AMD, what would your reaction be? Does it make sense now after all? A speculation and insistence is running around the market that Xilinx should buy AMD now.
Xilinx owns nearly 60 percent of the market whereas Altera only has 40 percent of the share. Altera is the smaller competitor of Xilinx. However, Intel is all set to acquire Altera which after the merger will obviously come up and the 20 percent market share difference won’t be a problem anymore.
Gus Richard who works with Northland Capital Markets currently and previously worked for Piper Jaffray started the AMD coverage and gave it a 5 dollar price tag when compared to their stock which is floating at $2.29 is ridiculously generous.
“Investors have decided that AMD has hit the iceberg and they are waiting for the ship to sink. However, we believe that AMD still has time to avoid the collision, and if all else fails investors will be bailed out by the lifeboat of M&A.”
So what exactly will happen once Intel has taken over Altera? The chip production cost will drop and it will cut all the differences which currently exist between Xilinx and Altera creating problem for the company.
AMD’s struggles in the previous years have given Nvidia a lot of space for crossing over and getting in the lead. Although AMD’s GPU position is overlooked sometimes and it might be the only thing that Xilinx might be interested in. However, AMD still has some lead over Intel but once its Skylane CPUs enter the market all rays of hope will vanish.