Intel does not seem to have capitalized on the Altera acquisition but maybe that is also related to Intel's fab issues.

From an operation perspective, this combines two non-overlapping TSMC customers that can potentially negotiate better wafer prices together. I assume that AMD has significantly higher wafer counts than Xilinx so this would primarily benefit the Xilinx business.

From a technology perspective, this acquisition may succeed where the Intel/Altera acquisition fizzled due to AMD's chiplet approach. Swapping a processor core for an FPGA chiplet might be an "easy" win in some markets.