Video game card and chipmaker Advanced Micro Devices (NASDAQ: AMD) has been one of the best-performing stocks so far this year. With more people staying at home and with little else to do during this pandemic, it’s not surprising that more people than ever have been turning to gaming than ever before. In this, turn has helped drive up demand for the company’s computer components even more. As it turns out, it appears that AMD is in the final stages of finalizing a major, $30 billion dollar merger with another chipmaker called Xilinx.
The Wall Street Journal went on to report that the two companies are considering a deal that could be officially announced as soon as next week. Although there’s still no guarantee that things will go through, especially considering that sources have said the talks have stalled at some points prior, it appears as if things are now moving ahead once more.
Considering just how much AMD’s shares have shot up due to the coronavirus pandemic and subsequent lockdowns, the company has decided to press its advantage by going ahead with major, stock-based acquisitions. AMD right now is worth around $100 billion, while its rival, Xilinx, is worth just $26 billion instead.
AMD’s major rival is Intel, another chipmaker currently leading the way in the market, having just announced its new, 11th generation of CPU back in September. The idea is that by gobbling up these smaller competitors, AMD will be in a better position to steal market share away from Intel and secure its own dominance in this industry.
At the same time, Niblinx also produces programmable chips used in wireless networks. This would mean that AMD could potentially expand into the rapidly growing telecom sector, just in time for the explosion of 5G networks being built right now all around the world. Representatives from both companies declined to comment when asked about this news.
While 2020 has seen a slowdown in major business deals, for the most part, three of the largest mergers so far this year have come from the semiconductor industry. Earlier this year, Analog Devices agreed to pay $20 billion for Maxim Integrated Products. Nvidia announced in September that it would pay $40 billion for the British chip designer Arm holdings, while this recent deal from AMD would be the third major semiconductor deal this year.
Shares of AMD actually didn’t respond that much in light of the news, with the stock staying completely the same in the hours after the announcement. Since the start of the year, however, AMD has shot up around 90%, making it one of the best-performing stocks on the market, alongside other tech giants out there.
AMD Company Profile
Advanced Micro Devices designs and produces microprocessors for the computer and consumer electronics industries. The majority of the firm’s sales are in the computer market via CPUs and GPUs. AMD acquired graphics processor and chipset maker ATI in 2006 in an effort to improve its positioning in the PC food chain. In 2009, the firm spun out its manufacturing operations to form a foundry joint venture, GlobalFoundries. – Warrior Trading News
