(Adds information on Huawei, cloud computing customer)
Oct 21 (Reuters) - Xilinx Inc forecast current-quarter revenue largely above Wall Street estimates on Wednesday, bolstered by rising sales of its chips to data centers, sending its shares up nearly 2% in extended trading.
The company said it expects third-quarter revenue of $750 million to $800 million, compared with analysts’ average estimate of $772.3 million, according to IBES data from Refinitiv.
Earlier this month, the Wall Street Journal reported that rival Advanced Micro Devices Inc is in talks to buy Xilinx in a deal that could be valued at more than $30 billion.
San Jose, California-based Xilinx makes programmable chips used in data centers to speed up tasks like artificial intelligence work and in 5G telecommunications base stations.
Xilinx’s data center chip business grew 30% to about $107 million, but the company said that growth would have been lower if not for the impact of trade restrictions that sped up sales to a customer it did not name but that most analysts believe is Huawei Technologies Co Ltd.
New regulations that took effect in September cut off nearly all American chip sales to Huawei.
“It was normal course of business kinds of orders, but because a deadline was looming, we needed to make sure we delivered that,” Xilinx Chief Executive Officer Victor Peng told Reuters, while declining to name the customer.
Xilinx also said it won a contract to supply networking cards to a major American cloud computing company. It did not name the customer but said the contract will be worth $100 million per year by 2024. “They’re getting more accustomed to us as a key supplier,” Peng told Reuters.
Net revenue of Xilinx fell to $767 million from $833 million in the second quarter, still topping estimates of $755.1 million on the back of strength in the data center unit.
Net income fell to $194 million, or 79 cents per share, in the quarter, from $227 million, or 89 cents per share, a year earlier. (Reporting by Munsif Vengattil and Stephen Nellis; Editing by Maju Samuel and Subhranshu Sahu)