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Intel plans to buy Mellanox, a server chip maker, for $6 billion
Data:2019-02-28 , 
According to Calcalist, an Israeli financial news website, Intel has offered to buy Mellanox Technologies for $5.5 billion to $6 billion in cash and stock.

Intel's $6 billion offer is 35% premium to Mellanox's closing price on the Nasdaq Stock Exchange, the report said. Headquartered in the Israeli city of Yokneam, Mellanox produces chips and other hardware for data center servers that support cloud computing.

Intel and Mellanox have not commented as of publication.

Last October, CNBC, the US financial website, reported that Mellanox had hired a financial adviser to study the sale after receiving offers from at least two companies.

On Monday, Moshe Kahlon, Israel's finance minister, announced Intel plans to invest $11 billion in expanding manufacturing operations in southern Israel.

Xilinx's acquisition of Mellanox has been rumored

In October last year, it was reported that Xilinx hired Barclays as a consultant to acquire Mellanox after contacting chip maker Mellanox. Of course, Intel was the other company rumored to have acquired Mellanox.

Mellanox, with a market capitalization of about $5 billion, was established in 1999 with headquarters in Santa Clara, California, and Yokneam, Israel. Mellanox is a leading provider of server and storage end-to-end connection solutions. It mainly sells network hardware for data centers, including Ethernet switches (Cisco dominates the market), as well as cable links to switches and other hardware. The acquisition of the company will provide Xilinx with a wider range of products, thus entering the data center market.

Mellanox reported revenue of $860 million in 2017, up 1% from 2016 and a loss of $19 million. The main products are InfiniBand and Ethernet interconnect chips, interface cards, etc. In 2017, InfiniBand products earned $400 million (2016, $477 million) and Ethernet products earned $400 million (2016, $317 million, 2015, $155 million).

It can be seen that IB business is shrinking, but Ethernet receivables are growing rapidly, so we can also foresee that Xilinx is looking at the combination of fast-growing Ethernet chips and board products with its own FPGA chips.

From the development of Mellanox, we can find that the future data center using 25/40/50/100Gb/s Ethernet interconnection is an inevitable trend. Especially when the price of flash memory drops rapidly, the NVMoF high-speed storage network will be popularized gradually after all-flash memory is used in enterprises and Internet and large data centers, and the demand for Ethernet interconnection technology will be stronger.
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