Intel is considering the acquisition of Altera

Intel is considering the acquisition of Altera

Intel Corporation is in talks with Altera, which specializes in the design of SoC and FPGA, to assess the possibility of an acquisition; The news was reported by the Wall Street Journal. The operation should be to strengthen the market position of Intel and could have a value of about $ 10 billion, representing the largest acquisition in the company’s history of Santa Clara and surpassing that of 7.7 billion to annex McAfee conducted in 2011.

Altera develops processors, FPGAs (Field Programmable Grid Array) and CPLD (Complex Programmable Logic Device) that are used in automotive environment, industrial, medical, military, telecommunications, storage, high performance computing, and in areas with special needs. Alters not only sells chips, also provides software tools, intellectual property, development kits, reference designs and SDK directed to various applications. Intel already integrates Altera FPGAs within HPC platforms selected or use them on-package with some Xeon processors for certain customers.

The acquisition of Altera would also further consolidate production agreements existing between the two companies, thus avoiding to keep factories Intel underutilized. Intel may choose to supplement more extensively FPGA and CPLD in its Xeon processors thus allowing end users to add a number of features to the processor even after their production. The customization of the CPU and Intel platforms will put in a position of better competitiveness than actually developing SoC class servers based on ARM architecture. It will also help to compete against the consortium led by IBM OpenPower.

In 2014 Altera has collected net sales to 1.932 billion dollars recorded a gross margin of 66.4% and a net profit of 472.65 million dollars. The company invests 21% of turnover, amounting to more than 418 million dollars in research and development and employs hundreds of millions of dollars for chip production at factories Intel Custom Foundry and at TSMC. While it appears very clear interest and motivation behind the desire for Intel to acquire Altera, counter an acquisition agreement seems to be less interesting for the latter. Altera it competes directly on the market only with Xilinx, has the very high margins and the existing relationship with the Intel offers access to cutting-edge production technologies. The company also collaborates with other organizations, a factor that allows it to turn to different markets.

Intel and Altera have not released any official comment, and although there is no confirmation, several sources indicate the agreement as now close to signing and an official announcement in a short time.

Intel is considering the acquisition of Altera updated: March 30, 2015 author: John Malkovich