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Macom bid $770 million for Applied's X-Gene ARM server SoC unit, showing ARM chips are not yet ready to power servers.

The acquisition of Applied’s X-Gene ARM server SoC unit would double the size of Macom.
Source: Macom via EE Times
Macom bid $770 million for Applied Micro in a deal that aims to sell off quickly Applied's X-Gene ARM server SoC unit. The deal is a sign that big data centers continue to drive lucrative communications markets aggressively and are not poised to embrace ARM servers in the near future.
Macom believes it got Applied's "gold nugget" of CMOS comms chips for a bargain at a 15.4 percent premium in a semiconductor merger frenzy that has seen premiums above 30 percent. In an indication of the pressure for Applied to cut its losses on its X-Gene ARM server SoC, the mixed cash and stock deal started at a 10 percent premium until Macom's stock price rose.
Macom saw Applied's leadership in the PAM-4 technology needed for 100 and 400Gbps Ethernet as a key prize. The deal also adds to Macom's telco customer list access to Applied's network OEM and data center customers, including Arista, Cisco, Juniper, Amazon, Facebook and Google.
The deal could add by 2019 $500 million a year to Macom's addressable market. The company that previously focused on analog RF and optical parts mainly for telecom providers had created a new data center group just recently.
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