AMD Plans to buy Pensando Systems Inc. for $1.9 Billion

Advanced Micro Devices Inc. is planning to acquire chip and software program startup Pensando Systems Inc. for $1.9 billion, returning to the acquisition playbook quickly after its biggest-ever transaction.

The proposed deal would add its product palette as semiconductor vendors reposition their offerings to take advantage of the growing demand for chips. Pensando would give AMD capabilities in the fields of networking, security and other services aimed at the data centre market.

Trading jackpots have been shaped by the growing demand for computers, phones, cars, and other devices that require chips to function. As work from home took pace during the pandemic, more and more people were buying computers running on AMD and its peers. Semiconductor sales exceeded $500 billion for the first time last year, and some industry analysts and executives expect it to double to about $1 trillion within 10 years.

AMD has gained a performance edge on Intel in recent years, sending its stock to new heights. It also has a big business supplying graphics-processing chips for personal computers and videogame consoles.

AMD has said that the Chief Executive at Pensando, Prem Jain and other employees will join AMD following the acquisition. The deal is expected to close in the current quarter, subject to regulatory approvals and some other pending steps. 

Founded in 2017, Pensando has been funded multiple times by investors such as Qualcomm's venture capital arm Hewlett Packard Enterprise Co. and investment bank Goldman Sachs Group Inc.