Intel has been working with Altera for a long time, and their decision to buy Altera FPGA came as no surprise. Once the deal was cemented, the industry analyzed the move from a number of angles. Did Intel overpay by shelling out $17 billion for Altera? What motivated Intel to purchase an FPGA company? How will this move impact Intel and Altera's competitors?
There are several reasons behind Intel's decision to purchase Altera.
1) Analysts believe that Intel was keen on entering the market to develop solutions for networking centers.
FPGA solutions are ideal because they reduce costs and increase performance. Intel can now target data centers at major companies such as Google, Facebook, LinkedIn and Twitter.
2) Following the slowdown in the PC market, Intel can now turn towards the growing mobile market.
This includes smartphones, tablets, phablets, and wearable technology. The demand and turnover for products in this market is much higher compared to PCs.
3) Intel can target applications in the IoT.
How will this impact Altera's competitors - mainly Xilinx FPGA?
1) Economies of scale
Intel can drop margins on Altera FPGA. Together Intel and Altera can undercut any opportunities that Altera and Intel had been competing for.
2) Customized solutions
Intel plans on combining Altera FPGA with its Xeon processors, allowing the company to create a hybrid Xeon-FPGA chip. There are a select number of customers who are looking to accelerate performance, and an FPGA can help achieve that.
There are several advantages.
1) Intel's decision to purchase Altera indicates that the market for FPGA will continue to grow.
2) Larger companies are slower, and R&D opportunities are limited.
Altera will be slow to churn out new developments and innovations, allowing Xilinx to take advantage of any opportunities that Intel-Altera will need some time to consider.
It is not the best strategy, but analysts feel that Xilinx should ally itself with a company that produces x86 compatible chips. In addition to Intel, AMD is another company that produces x86 chips. By combing Xilinx FPGA with AMD chips, Xilinx will have a clear stepping field into the market for data and networking centers.
EarthTron LLC is based in Portsmouth, NH. EarthTron is an Altera distributor and a Xilinx distributor. We are actively looking for FPGA excess and OEM RFQs for both Altera and Xilinx FPGA.
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