As NVIDIA and rival advanced micro devices inc. 's AMD, + 1.02% AMD, + 1.02% have stumbled in the past two years as a result of the death of miners, the companies have learned to their delight that such windfalls aren't necessarily good for business in the long run. With more than 80 percent of the GPU market in its hands, what's next for NVIDIA? NVIDIA will buy Mellanox for $6.9 billion. The acquisition is expected to be completed by the end of this year.
Yesterday we briefly introduced Mellanox, an Israeli company that, despite many media reports, is primarily based in the United States. It has two headquarters and is a leading provider of end-to-end Ethernet and InfiniBand intelligent interconnect solutions and services for server, storage, and hyperaggregation infrastructures.
Mellanox currently has a market value of $6.39 billion, revenue of $863 million in 2017, and gross profit margin of $563 million. Therefore, the company is highly profitable in terms of business, and gross profit margin is even higher than GPU.
NVIDIA sporty Mellanox company but also for the latter, especially in the field of high performance computing network advantages, regardless of HPC supercomputers or data center, ordinary people care about is the CPU processor, GPU, accelerator and other products, but as the computing scale increasing, the importance of network chip in which more and more important, while the Mellanox company is of high performance interconnection technology early innovators, they launched the InfiniBand interconnect technology, the technology and the high speed Ethernet products used in the world with more than half of supercomputers and in the field of large-scale data center.
NVIDIA has a long history of working with Mellanox, most recently with the U.S. department of energy's Sierra and Summit, the TOP500 supercomputer of the moment, using IBM's Power 9 processor, NVIDIA's Tesla accelerator card, and Mellanox's network node technology.
After the Mellanox acquisition, NVIDIA said the move would immediately increase the company's non-gaap gross margin, earnings per share and cash flow. The deal has been approved by the boards of both companies and is expected to close by the end of this year, although regulatory approval is needed.