Xilink SWOT and PESTLE Analysis

Strength

1. Successful track record of developing new and innovative products: Xilinx is the inventor of the FPGA (Field Programmable gate array), Programmable SoCs and the recently launched ACAP (Adaptive Compute Acceleration Platform). It has been highly successful in developing new products that are more desirable due to their lower cost as compared to its competitors. This is made possible due to their highly flexible and programmable silicon. They use 2.5D stacked silicon instead of monolithic silicon as the FPGA’s can be made larger and consume less power. This technology helps to drive innovation across a wide span of industries – ‘from cars to the cloud’. Xilinx has also penetrated markets by introducing low cost alternatives, for example - the new Xilinx single-core Zynq 7Z007S device which is available at only $89. The company has also been successful in developing products using AI – developing a cloud based adaptive machine learning model that can recognize different lung infections from X-rays – highlighting their ability to adapt to the Coronavirus Pandemic.

2. Developed a very reliable supply chain model with a strong dealer community: Xilinx sells its products to OEMs (Original Equipment Manufacturers), EMS (Contract Manufacturers) and to electronic components distributors who resell these products to OEMs and EMS. Distributors and independent sales representatives create demand within the balance of their customer base in defined territories. Distributors also provide inventory, value-added services and logistics for a wide range of our OEM customers. Their relations with the distributors are strong because of certain policies – they have granted their authorized distributors the contractual right to return certain amounts of unsold product on a periodic basis and also receive price adjustments for unsold product in the case of a change in list prices subsequent to the initial sale. Avnet, Inc. (Avnet) distributes the substantial majority of Xilinx products worldwide. As of March 31, 2018 and April 1, 2017, Avnet accounted for 60% and 59%, respectively, of their total net accounts receivable. This represents their strong dealer community and the effectiveness of their supply chain model.

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Weakness

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Opportunity

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Threats

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Political

1. Biden administration plans to hike corporate tax: Joe Biden – the President of the United States belongs to the Democratic Party and is determined to increase corporate taxes on large enterprises which will increase federal tax revenues by $2.4 trillion. His administration has expressed interest to raise corporate tax from 21% to 28%. This will then be used to create a ‘Small Business fund’ to support start-ups that were hit by the pandemic. He has also proposed increasing the tax on capital gains and dividends for incomes over $1 million – this will have an adverse impact on shareholders as well as employees as it will discourage them. Trump’s policies had certain loopholes that saved companies from being taxed on foreign profits – Biden wants to remove these loopholes which will further impact revenues because of Xilinx’s worldwide market.

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Economic

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Social

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Technological

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Legal

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Environmental

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