Intel to buy FPGA maker Altera for more than $16 billion

According to a report I heard on CNBC this morning, computer chip giant Intel in Santa Clara, Calif., is looking to buy FPGA-designer Altera in San Jose, Calif., for about 16.7 billion or $54 a share. Altera Stratix FPGAs play key links military signal processing chains for applications such as radar, sonar, and electronics warfare to name a few.

Having Intel behind Altera might also give a leg up in terms of capital in its never-ending battle against its main competitor . The two producers have been going head to head for decades with Xilinx traditionally having a leg up in terms of adaption in defense electronics, but that has been changing lately with more defense FPGA board designers offering Altera FPGA-based board products such as Annapolis Microsystems and Bittware.

Intel processors already drive many signal-processing intensive applications so their purchase of Altera should signify positive growth for Stratix within military applications.

Intel is motivated to make this purchase likely as a way to overcome technological hurdles, according a CNBC interview story with David Garrity of GVA Research. “As Intel continues to reduce the size of its chips, its ability to use the full benefit of those chips is limited,” Garrity said. But Altera’s FPGAs enable a way for Intel to enhance the performance of its chips at a slightly higher cost, he added.

In the CNBC story Garrity said other potential acquisition FPGA-maker targets for Intel’s main competitor, , include Xilinx and . However, Garrity added that AMD might not be ready to make such a purchase.

According to the CNBC story Altera rejected a similar bid of $54 a share in April.

To learn how this affects the commercial embedded market, read a blog written by my counterpart, Rich Nass.

To read more about Altera FPGAs click here: Smaller form factors benefit electronic warfare applications

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