Intel in “advanced talks” to buy Altera - report

Intel in “advanced talks” to buy Altera – report

30 MAR 2015

Intel is in discussions to buy Altera, a chip partner, in what would be the biggest ever acquisition by the US chip giant if the deal went through.

Details are scant, but when the Wall Street Journal (WSJ) first reported talks last Friday – citing unnamed sources – it was enough to send Altera’s market capitalisation soaring, from $10.4 billion to $13.4 billion. Intel shares were up on the day, too, by around 6 per cent.

Altera, a fabless company, specialises in field-programmable gate arrays (FPGAs) – chips that can be re-programmed after they have been manufactured. It is a market in which the Silicon Valley outfit dominates, along with Xilinx.

“I think FPGAs are hot and having [Altera] in-house is a big win for Intel,” said Roger Kay, an analyst at researcher Endpoint Technologies Associates, quoted by the WSJ.

The WSJ points out, however, that a tie-up with Altera may not help Intel get a stronger foothold in the smartphone market – an area in which it has struggled to compete against chip designs from UK-headquartered ARM Holdings – but Altera’s chips are widely-used in base stations.

The strength of Altera’s FPGA business helped grow annual net sales by 12 per cent, to $1.9 billion, during 2014. “We are outpacing the semi-conductor industry,” said Altera chief executive John Daane when full-year financials were published. He could also point to a respectable 7 per cent increase in net income, to €472 million.

Altera is also looking at next-generation mobile networks. At this year’s Mobile World Congress, and in partnership with China Mobile, Altera demonstrated a cloud radio access network (C-RAN) platform, targeting virtualised 5G wireless networks.

In 2013, Intel struck a deal with Altera to manufacture future chips in its foundries, although it is not clear from reported discussions between the two companies if Altera would continue to use Taiwan Semiconductor Manufacturing, which has been responsible for making its previous generations of products.

Author

Ken Wieland

Ken has been part of the MWC Mobile World Daily editorial team for the last three years, and is now contributing regularly to Mobile World Live. He has been a telecoms journalist for over 15 years, which includes eight...More

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