Intel CEO: Altera deal enables products that don’t exist today
Intel Corp. is buying smaller chipmaker Altera in a $16.7 billion all-cash deal that Intel CEO Brian Krzanich says will aid the company as it enables a new product class.
The Intel/Altera rumors have swirled since news about talks first surfaced in March. The discussions apparently heated up in the last several weeks as analysts chimed in on why such a deal makes sense.
Intel’s interest in Altera stems from the company’s expertise in field-programmable gate array technology. Such chips can be programmed by customers for different applications after the chips are manufactured. In contrast, Intel’s products are made for specific applications and can’t be changed after the fact.
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Programmable chips are finding more uses in data center and Internet of Things applications, two areas that Intel has pegged for its growth strategy. In the first quarter, the data center group generated $3.7 billion in revenue and reported the highest year-over-year percentage growth of the company’s four groups, at 19 percent.
“This acquisition is a perfect extension of this strategy,” Krzanich told industry analysts on a conference call soon after the deal announcement. “By bringing together our leading processor with Altera’s hardware of programmable FPGAs we can make the next generation of semiconductors not just better but truly able to do more.”