Chip wars: AMD bulks up to battle Intel

AMD is bulking up for battle with Intel.

On Tuesday (October 27) the U.S. chip designer said it had agreed to buy rival Xilinx.

The all-stock deal is valued at 35 billion dollars.

It will create a company with 13,000 engineers, and an all-outsourced manufacturing strategy.

AMD has long been Intel’s big rival in the central processor units, or CPUs, that lie at the heart of personal computers.

But Chief Executive Lisa Su has focused on challenging Intel in the fast-growing business of data centers too.

They’re the vast computing hubs that power online applications and services.

Now Su says a tie-up with Xilinx will boost its capability in that market.

The deal comes with AMD already on the offensive.

It’s seen to have gained a lead over Intel in CPU performance.

That’s helped it gain almost a fifth of that market - its best share since 2013.

Both it and Xilinx use contract manufacturer TSMC to make their chips.

And industry experts say the Taiwan firm is years ahead of Intel on manufacturing.

Tuesday also saw AMD report earnings earlier than expected.

It beat analyst forecasts for both revenue and profits.