Asian media reports unanimously that AMD will significantly raise the prices of the acquired company Xilinx. In the best case, there is talk of 8 percent, but certain product groups are said to be 25 percent more expensive.
AMD emphasizes that this is how they want to recover the increased costs and investments in a stable supply chain the group in a letter. The price increases will be applied to all affected products from January 9, 2023, even those that have already been ordered and entered in the backlog, but customers will still have to wait for this due to the long delivery time.
Almost all Xilinx product series are increasing in price, with the exception of their most advanced solution based on a 7nm process. Here the price should have been set correspondingly higher from the outset, the greatest shortage and highest price spiral recently prevailed more in the ranges from 28 to 45 nm. Ultimately, the 25 percent additional costs apply here, while at the lower end it is “only” 8 percent are.
The fact that it affects the mature processes, as the older manufacturing solutions are called in the industry, is nothing new. This is exactly where countless car manufacturers are on the hunt for chips, but the production capacities in this area have been expanded only minimally or not at all for years. That is currently changing, even industry giants such as TSMC are building new factories explicitly only for 28 nm chips, one of which may even come to Germany “>Xilinx cost AMD almost USD 50 billion (in shares)
In the end, the acquisition of Xilinx not only cost AMD the previously forecast USD 35 billion, but also nearly $50 billion. However, the new branch of the company shows a stable economic situation and delivered a convincing picture in the last quarterly figures, although the integration into AMD costs money in addition to the operative business with a profit. The first products that combine the know-how of both sectors should be available in 2023.
Xilinx division is the primary part of AMD's embedded segment (Image: AMD)