Today Xilinx had two major announcements. The first is that the company saw 30% Y/Y revenue increases as it pursues its “data center first” strategy. A surprise was that Xilinx announced that it has reached an agreement to acquire SolarFlare, the SmartNIC company. SolarFlare is well-known in the space as the company has pioneered a number of NIC offload techniques over the years.
Xilinx to Acquire SolarFlare for SmartNIC Capabilities
From a market perspective, Xilinx is signaling that it sees a large SmartNIC market opportunity. Less than a year ago, Xilinx made a strategic investment in SolarFlare. Now the company is taking SolarFlare in-house.
SmartNICs have become important for offloading tasks from CPUs. We saw Microsoft Project Brainwave use Intel FPGAs for AI. We have also seen cloud providers like Amazon offload functions to ensure CPUs are available for rent by customers. We have seen new solutions such as the Intel FPGA Programmable Acceleration Card N3000 for Networking. Intense interest in this space from large hyperscale customers and service providers has led to many hardware vendors getting involved.
Impact on Other SmartNIC Companies
Perhaps one of the more intriguing aspects to the acquisition is that it means Xilinx is directly entering a new market. With NVIDIA’s purchase of Mellanox, Xilinx supplying the FPGA for cards like the Mellanox Innova-2 made sense.
With the purchase of SolarFlare, Xilinx now owns a competitor to Mellanox in the Ethernet space. That leaves NVIDIA-Mellanox with a choice to make. Stay with Xilinx, a competitor in the SmartNIC market for its FPGAs, or go with Intel, also a SmartNIC competitor FPGAs. Beyond NVIDIA-Mellanox, others developing SmartNICs on Xilinx FPGAs may have to make a similar decision.
Who is Next?
The market for smaller NIC companies with solid traction is decreasing with both Mellanox and SolarFlare finding suitors. Chelsio Communications comes to mind and may be a good fit for Intel who is currently lacking in NICs, even with the recent Intel Ethernet 800 Series 100GbE NIC Launch.