In Wake of Nvidia-Mellanox: Xilinx to Acquire Solarflare 

With echoes of Nvidia’s recent acquisition of Mellanox, FPGA co-leader (along with Intel) has announced a definitive agreement to acquire Solarflare Communications, provider of high performance-low latency networks beloved by financial services and cloud services companies.

Xilinx said the acquisition will enable the company to combine its FPGA, MPSoC and ACAP solutions with Solarflare's ultra-low latency network interface card (NIC) technology and Onload application acceleration software to enable new converged SmartNIC solutions, “accelerating Xilinx's ‘data center first’ strategy and transition to a platform company,” according to Xilinx. Terms of the deal were not disclosed.

The Xilinx move mirrors Nvidia’s $6.9 billion purchase in March of high performance network maker Mellanox. In fact, Xilinx was among the companies rumored to have been courting Mellanox last year and this. CNBC reported that Xilinx was working with Barclays on a purchase priced at $100/share, or about $5 billion. The purchase of Solarflare would appear to bear those rumors out.

“Both Xilinx and Nvidia see the need for high bandwidth, low latency interconnects in the data center,” Karl Freund, senior analyst HPC and deep learning, Moor Insights & Strategy, told us, “and want to explore tighter integration with their respective platforms to optimize the solution at the rack level and even higher. Nvidia goes up the stack when doing so, accelerates time to market for optimized solutions like DGX and NVSwitch. Both companies want to expand their role as a platform provider as they can add more value and become even more competitive.”

Xilinx and Solarflare have collaborated on advanced networking technology for the last two years, with Xilinx becoming a strategic investor in 2017. The two companies recently demonstrated their first joint solution – a single-chip FPGA-based 100G SmartNIC, processing 100 million packets per-second receive and transmit, at less than 75 watts.

"The Solarflare team has worked very closely with Xilinx on next-generation networking technology and business collaboration since Xilinx became a strategic investor," said Russell Stern, chief executive officer, Solarflare. "Our shared vision for the future of data center and cloud computing and the integration of our respective technologies makes this acquisition the ideal next step for our customers, employees, and investors, as well as the broader data center industry."

Citing Solarflare’s work in high-speed Ethernet, application acceleration, and NVMe-over-fabrics, Salil Raje, executive vice president and general manager of Xilinx’s Data Center Group, said Solarflare has been active in “the critical components needed to build the next generation of SmartNICs for cloud and enterprise technologies. Acquiring Solarflare brings Xilinx both market-leading technology and exceptional engineering talent with expertise in networking hardware, software, firmware and drivers."

The acquisition is expected to close in Xilinx's second quarter of fiscal year 2020, following regulatory review and other customary closing conditions.

The acquisition was announced at the same time Xilinx announced what it said are record revenues of $3.06 billion for fiscal year 2019, up 24 percent from the prior fiscal year. Revenues were $828 million for the fourth quarter of fiscal year 2019, up 4 percent from the prior quarter and up 30 percent YoY.

GAAP net income for fiscal year 2019 was $890 million, or $3.47 per diluted share while net income for quarter ended March 31 was $245 million.