China's market regulator has conditionally approved semiconductor group Advanced Micro Devices Inc's $35 billion all-stock deal for peer Xilinx , it said on Thursday.
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The regulatory approval from Beijing brings the purchase, which was first announced in October 2020 , closer to completion.
In a public notice, China's State Administration for Market Regulation said it will approve the deal on condition that AMD and Xilinx do not force tie-in sales of products or discriminate against customers that buy one set of products but not another.
The regulator added that the newly merged entity must also ensure "the flexibility and programmability of Xilinx FPGAs" and "that their development methods are compatible with ARM-based processors".
It must also make sure that its GPUs and FPGA products sold to China are interoperable with products in the China market.
The merger comes as both AMD and Xilinx compete against Intel Corp to penetrate the market for data centre chips.
Washington and Beijing have at times brought pending mergers in the chip sector to a halt by withholding regulatory approval.
In March 2021, Applied Materials Inc abandoned its planned $2.2 billion purchase of Japan's Kokusai Electric Corp, citing a lack of regulatory approval from China.
In December U.S.-listed chipmaker Magnachip Semiconductor Corp announced it would terminate a $1.4 billion buyout plan from Chinese private equity firm Wise Road Capital following a probe into the deal from Washington's Committee on Foreign Investment in the United States (CFIUS).