The Fair Trade Commission has approved Advanced Micro Devices Inc’s (AMD) bid to fully acquire ZT International Group Inc for US$4.9 billion, saying it would not hamper market competition.
As AMD is a fabless company that designs central processing units (CPUs) used in consumer electronics and servers, while ZT is a data center manufacturer, the vertical integration would not affect market competition, the commission said in a statement yesterday.
ZT counts hyperscalers such as Microsoft Corp, Amazon.com Inc and Google among its major clients and plays a minor role in deciding the specifications of data centers, given the strong bargaining power of those technology giants, the commission said.
Photo: Reuters
After acquiring ZT, AMD would still face strong competition from market leaders — Intel Corp, the world’s biggest supplier of CPUs used in data centers, and Nvidia Corp, the top supplier of graphics processing units (GPUs) for data centers, the commission said.
In addition, AMD’s local suppliers expect their business partnerships with the new entity would remain intact following the merger, it said, adding that some suppliers have said the deal would not block their access to the market.
“As the merger of the companies would not fan fears of hindering competition, the commission would not ban the consolidation,” it said.
The strategic deal marks the next major step in AMD’s artificial-intelligence (AI) strategy to deliver leadership AI training and inferencing solutions based on innovating across silicon, software and systems, the company said in August last year.
ZT’s extensive experience designing and optimizing cloud computing solutions would also help cloud and enterprise customers significantly accelerate the deployment of AMD-powered AI infrastructure at scale, it said.
AMD said it expects the transaction to be accretive on a non-GAAP basis by the end of this year. The US firm has agreed to acquire ZT in a cash and stock transaction valued at US$4.9 billion, inclusive of a contingent payment of up to US$400 million based on certain post-closing milestones.
Inventec Inc (英業達), the biggest shareholder of ZT with a 10 percent share, said it would book NT$13.16 billion (US$398 million) in disposal gains from the deal.
Taiwanese suppliers to Taiwan Semiconductor Manufacturing Co. (TSMC, 台積電) are expected to follow the contract chipmaker’s step to invest in the US, but their relocation may be seven to eight years away, Minister of Economic Affairs J.W. Kuo (郭智輝) said yesterday. When asked by opposition Chinese Nationalist Party (KMT) Legislator Niu Hsu-ting (牛煦庭) in the legislature about growing concerns that TSMC’s huge investments in the US will prompt its suppliers to follow suit, Kuo said based on the chipmaker’s current limited production volume, it is unlikely to lead its supply chain to go there for now. “Unless TSMC completes its planned six
Power supply and electronic components maker Delta Electronics Inc (台達電) yesterday said second-quarter revenue is expected to surpass the first quarter, which rose 30 percent year-on-year to NT$118.92 billion (US$3.71 billion). Revenue this quarter is likely to grow, as US clients have front-loaded orders ahead of US President Donald Trump’s planned tariffs on Taiwanese goods, Delta chairman Ping Cheng (鄭平) said at an earnings conference in Taipei, referring to the 90-day pause in tariff implementation Trump announced on April 9. While situations in the third and fourth quarters remain unclear, “We will not halt our long-term deployments and do not plan to
‘SHORT TERM’: The local currency would likely remain strong in the near term, driven by anticipated US trade pressure, capital inflows and expectations of a US Fed rate cut The US dollar is expected to fall below NT$30 in the near term, as traders anticipate increased pressure from Washington for Taiwan to allow the New Taiwan dollar to appreciate, Cathay United Bank (國泰世華銀行) chief economist Lin Chi-chao (林啟超) said. Following a sharp drop in the greenback against the NT dollar on Friday, Lin told the Central News Agency that the local currency is likely to remain strong in the short term, driven in part by market psychology surrounding anticipated US policy pressure. On Friday, the US dollar fell NT$0.953, or 3.07 percent, closing at NT$31.064 — its lowest level since Jan.
The New Taiwan dollar and Taiwanese stocks surged on signs that trade tensions between the world’s top two economies might start easing and as US tech earnings boosted the outlook of the nation’s semiconductor exports. The NT dollar strengthened as much as 3.8 percent versus the US dollar to 30.815, the biggest intraday gain since January 2011, closing at NT$31.064. The benchmark TAIEX jumped 2.73 percent to outperform the region’s equity gauges. Outlook for global trade improved after China said it is assessing possible trade talks with the US, providing a boost for the nation’s currency and shares. As the NT dollar
RSS