Mergers & Acquisitions

11 Articles

AMD Acquires Xilinx For $35 Billion

October 27, 2020 by 45 Comments

News this morning that AMD has reached an agreement to acquire Xilinx for $35 Billion in stock. The move to gobble up the leading company in the FPGA industry should come as no surprise for many reasons. First, the silicon business is thick in the age of mergers and acquisitions, but more importantly because AMD’s main competitor, Intel, purchased the other FPGA giant Altera back in 2015.

Primarily a maker of computer processors, AMD expands into the reconfigurable computing market as Field-Programmable Gate Arrays (FPGA) can be adapted to different tasks based on what bitstream (programming information written to the chips) has been sent to them. This allows the gates inside the chip to be reorganized to perform different functions at the hardware level even after being put into products already in the hands of customers.

Xilinx invented the FPGA back in the mid-1980s, and since then the falling costs of silicon fabrication and the acceleration of technological advancement have made them evermore highly desirable solutions. Depending on volume, they can be a more economical alternative to ASICs. They also help with future-proofing as technology not in existence at time of manufacture — such as compression algorithms and communications protocols — may be added to hardware in the field by reflashing the bitstream. Xilinx also makes the Zynq line of hybrid chips that contain both ARM and FPGA cores in the same device.

The deal awaits approval from both shareholders and regulators but is expected to be complete by the end of 2021.

Nvidia Acquires ARM For $40 Billion

September 14, 2020 by 75 Comments

Nvidia announced on Sunday evening that it has reached an agreement to acquire Arm Limited from SoftBank for a cool $40 billion.

In this age of headlines that use the b-word in place of nine zeros it’s easy to lose track, so you may be wondering, didn’t SoftBank just buy Arm? That was all the way back in July of 2016 to the tune of $32 billion. SoftBank is a holding company, so that deal didn’t ruffle any feathers, but this week’s move by Nvidia might.

Arm Limited is the company behind the ARM architecture, but they don’t actually produce the chips themselves, instead licensing them to other companies who pay a fee to use the core design and build their own chip around it. Nvidia licenses the ARM core for some of their chips, and with this deal they will be in a position to set terms for how their competitors may license the ARM core. The deal still needs regulatory approval so time will tell if this becomes a kink in the acquisition plan.

There’s a good chance that you’re reading this article on a device that contains an ARM processor because of its dominance in the smartphone and tablet market. Although less common in the laptop market, and nearly unheard of in the desktop market, the tide may be changing as Apple announced early in the summer that their Mac line will be moving to ARM.

Chances are you know the Nvidia name for their role as purveyors of fine graphics cards. They got a major boost as the world ramped up Bitcoin and other cryptocurrency mining hardware which early on was mainly based on the heavy lifting of graphics processors. But the company also has their eye on the ongoing wave of hardware targeting AI applications like computer vision. Nvidia’s line of Jetson boards, marketed for “next-generation autonomous machines”, all feature ARM cores.

Assuming the deal goes through without a hitch, what will be the fallout? Your guess is as good ours. There is certainly a conflict of interest in a company who competes in the ARM market owning the Arm. But it’s impossible to say what efforts they will make to firewall those parts of the business. Some might predict a mass exodus from the ARM ecosystem in favor of an open standard like RISC-V, but that is unlikely in the near-term. Momentum is difficult to overcome — look at how long it took ARM to climb that mountain and it was primarily the advent of a new mobile ecosystem lacking an established dominant player that let ARM thrive.

Mergers And Acquisitions: Analog Devices Snaps Up Maxim Integrated For $21 B

July 13, 2020 by 25 Comments

Analog Devices will acquire Maxim Integrated for $20.9 billion dollars in stock, as reported by Bloomberg this morning.

Perhaps the confusing part of the news is that the Bloomberg article mentions the acquisition will let Analog Devices better compete with Texas Instruments. Wait, didn’t Texas Instruments acquire Maxim back in 2015? Actually, no. There were rumors (reported then by Bloomberg) that TI was nearing an acquisition deal but it fell through in January of 2016.

You may remember that Analog Devices snapped up Linear Tech in a $30 B acquisition back in 2017. Considering this morning’s news, how will they compare to the might of TI? Looks like 2019 revenue for TI was $14.38 B while Analog reported $5.99 B. Add in Maxim’s revenue of $3.1 B and there’s still a David and Goliath scenario here. Although revenue doesn’t tell the whole story and the proverbial slingshot for Analog may be its existing portfolio of high-margin devices, grown even larger with this acquisition.

Considering how the last half decade played out, this might mark the beginning of another wild cycle of mergers and acquisitions. The consolidation trend continues as we approach a world where just a few gigantic semiconductor companies turn production lines up to eleven to fill the world’s insatiable appetite for more powerful electronics (and more electronics in general).

Official: Pebble Ceases Hardware Production

December 7, 2016 by 32 Comments

Today Pebble has announced that it will cease all hardware production. Their outstanding Kickstarter deliveries will not be fulfilled but refunds will be issued. Warranties on all existing hardware will no longer be honored. However, the existing smartwatch service will continue… for now.

This isn’t unexpected, we ran an article yesterday about the all-but-certain rumors FitBit had acquired Pebble (and what led to that). Today’s news has turned speculation about Pebble 2 and Pebble Core Kickstarter campaigns into reality. You won’t get your hands on that fancy new hardware, but at least backers will have the money returned.

Perhaps the most interesting part of today’s blog post from the founder of Pebble, Eric Migicovsky, is about how this impacts more than a million watches already in the wild. Service will continue but (wait for it) “Pebble functionality or service quality may be reduced in the future.”

It’s not like this is a unique problem. Devices purchased by consumers that are dependent on phoning home to a server to function is a mounting issue. Earlier this year [Elliot Williams] coined this issue “Obsolescence as a Service” which is quite fitting. Anyone who still has a functional first generation iPad has enjoyed reduced quality of service; without available upgrades, you are unable to install most apps. It’s zombie hardware; electrons still flow but there’s no brain activity.

One of the perks associated with FitBit acquiring Pebble is that they have decided to keep those servers running for watches in the field. A cynic might look at the acquisition as FitBit reducing competition in the market — they wouldn’t have let hardware production cease if they were interested in acquiring the user base. At some point, those servers will stop working and the watches won’t be so smart after all. FitBit owns the IP which means they could open source everything needed for the community to build their own server infrastructure. When service quality “reduced in the future” that’s exactly what we want to see happen.

The Demise Of Pebble As A Platform

December 6, 2016 by 62 Comments

Despite owning five, including the original Pebble, I’ve always been somewhat skeptical about smart watches. Even so, the leaked news that Fitbit is buying Pebble for “a small amount” has me sort of depressed about the state of the wearables market. Because Pebble could have been a contender, although perhaps not for the reason you might guess.

Pebble is a pioneer of the wearables market, and launched its first smartwatch back in 2012, two years before the Apple Watch was announced. But after turning down an offer of $740 million by Citizen back in 2015, and despite cash injections from financing rounds and a recent $12.8 million Kickstarter, the company has struggled financially.

An offer of just $70 million earlier this year by Intel reflected Pebble’s reduced prospects, and the rumoured $30 to $40 million price being paid by Fitbit must be a disappointing outcome for a company that was riding high such a short time ago.

Continue reading “The Demise Of Pebble As A Platform” →

Qualcomm Buys NXP In Largest Ever Semiconductor Deal

October 27, 2016 by 30 Comments

Reuters has reported that Qualcomm will purchase NXP for $38 Billion in the largest semiconductor deal ever.

This deal was rumored last month in a deal worth about $30 Billion. Qualcomm’s name should be familiar to all Hackaday readers – they have an immense portfolio of mobile processors, automotive chips, and a ton of connectivity solutions for WiFi, Bluetooth, and every other bit of the EM spectrum. NXP should also be familiar for their hundreds of ARM devices, automotive devices, and Freescale’s entire portfolio.

The deal for $38 Billion is just a bit larger than the previous largest semiconductor deal, Avago’s purchase of Broadcom for $37 Billion.

This latest acquisition has followed acquisitions of ARM Holdings by Japan’s Softbank, On and Fairchild, Avago and Broadcom, NXP and Freescale, Microchip and Atmel, Intel and Altera, and a few dozen we’re forgetting right now. The good news is this immense industry consolidation won’t result in a single gigantic chip maker; there will probably be two or three gigantic chip companies in the future. If I may dredge up an observation from a Mergers and Acquisition post from this summer, this trend didn’t go well for Hughes, Fairchild, Convair, Douglas, McDonnell Douglas, North American, Grumman, Northrop, Northrop Grumman, Bell, Cessna, Schweizer or Sikorsky. It went very well for Lockheed, Boeing, and Textron.

Qualcomm Looks To Gobble Up NXP

September 30, 2016 by 31 Comments

Remember when we talked about NXP merging with Freescale to move into the top ten semiconductor companies? Yeah, that was just eighteen months ago and just barely closed before the new year. Now it looks like Qualcomm wants to acquire NXP to the tune of $30 billion.

You’re most likely familiar with Qualcomm as a cellphone silicon company. The acquisition of NXP opens up a lot of additional markets with their portfolio of chips — automotive among them thanks to the Freescale merger. Now you should be asking yourself just how big Qualcomm is already. What’s perhaps most interesting is that, as mostly a wireless chip company, Qualcomm is ranked number three in worldwide semiconductor sales. Adding NXP — a behemoth now in the top ten — adds at least 30% to Qualcomm’s numbers.

And so here we are, one step close to a monolithic chip fab that produces all computing power for the human race. Yippie!