Nvidia beats Microsoft, Intel for chip maker Mellanox in $7B deal

Nvidia beats Microsoft, Intel for chip maker Mellanox in $7B deal

Mellanox, which makes chips and other hardware for data center servers that power cloud computing, said it does not comment on rumors or speculation. "Addressing this demand will require holistic architectures that connect vast numbers of fast computing nodes over intelligent networking fabrics to form a giant datacenter-scale compute engine".

Nvidia and Intel are reportedly in a battle for control of Israeli chipmaker Mellanox Technologies, with Nvidia claimed to have the lead bid for ownership of the company. It boasts that its technology is used in half of the top 500 most powerful supercomputers.

The move could bolster Nvidia against its chief rival in the data centre business, Intel.

NVIDIA says it will use the acquisition to cement its leadership in high-performance computing (HPC).

"We share the same vision for accelerated computing as NVIDIA", Mellanox founder and CEO Eyal Waldman said in a statement.

The rampant rumors of a Mellanox acquisition has helped run up the company's stock price from a low of $66 last October 24th to today's price of $119, as of this writing, up 8.5 percent.

The deal may signal a resumption of consolidation in the $470 billion semiconductor industry, which has been reshaped over the past five years as companies combined to gain scale while battling rising costs and shrinking customer lists.

And Shebly Seyrafi, an analyst at FBN Securities, agrees that the unit will provide broad solution sets to overcome bottlenecks in the data-center market.

Mellanox reported better-than-expected results for 2018, achieving a record $1.1 billion in revenue, an increase of 26% from 2017. The transaction will still have to win approval from regulators. That process has become more complicated as the USA faces off with China over trade.

Qualcomm Inc.'s bid for NXP Semiconductors NV was abandoned a year ago after failing to get approval in China before a company imposed deadline.

Goldman Sachs served as exclusive financial adviser to Nvidia, while Credit Suisse Group and JPMorgan Chase & Co. advised Mellanox.

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