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Illustration: Rebecca Zisser/Axios

Advanced Micro Devices (Nasdaq: AMD) agreed to buy rival U.S. chipmaker Xilinx (Nasdaq: XLNX) for $35 billion in stock.

Why it matters: AMD is expanding at the same time that rival Intel is divesting, using the nearly $40 billion in market cap it's gained so far in 2020. The deal also reflects rapid growth of the data center market, due to increased demand from cloud computing giants like Amazon, Google, and Microsoft.

Details: AMD is paying the equivalent of $143 per share, representing nearly a 25% premium to yesterday’s closing price for Xilinx stock.

  • The deal requires regulatory approval, including in China, with AMD estimating that it may not close until early 2022.
  • AMD would be required to pay Xilinx $1.5 billion if it terminates the transaction, while Xilinx would pay $1 billion were it to terminate.

The bottom line: "The deal will give [AMD CEO Lisa] Su more of the pieces she needs to break Intel’s stranglehold on the profitable market for data center computer components. Xilinx... makes field programmable gate arrays, or FPGAs. That kind of chip is unique because its function can be altered by software, even after it’s been installed in a piece of machinery." — Ian King, Bloomberg

Go deeper

Ina Fried, author of Login
Jan 13, 2021 - Technology

Intel names former exec Pat Gelsinger as new CEO

Gelsinger. Photo: Intel

Intel said Wednesday that VMware CEO Pat Gelsinger will return to the chipmaker as CEO, with current chief Bob Swan stepping down as of Feb. 15.

Why it matters: Intel faces a host of challenges from manufacturing issues to competition from rival AMD to Apple's move to use homegrown chips in the Mac.

Dion Rabouin, author of Markets
7 mins ago - Economy & Business

The digital dollar is now high priority for the Fed

Illustration: Aïda Amer/Axios

The U.S. is starting to get serious about a central-bank-backed digital currency, with recent comments from top officials laying out the strongest support yet.

Driving the news: On Tuesday Fed chair Jerome Powell told Congress that developing a digital dollar is a "high priority project for us," but added that there are "significant technical and policy questions."

Dan Primack, author of Pro Rata
1 hour ago - Economy & Business

Coinbase files to go public

Illustration: Eniola Odetunde/Axios

Cryptocurrency exchange Coinbase on Thursday filed to go public via a $1 billion direct listing.

Why it matters: This comes in the midst of a crypto boom, and the listing may further legitimize the industry.