Intel Completes Altera Buy, Eyes Next-Gen Data Centers and IoT

It’s a done deal.

Though not quite as big as Dell’s historic $67 billion bid for storage giant EMC, Intel just completed a mammoth acquisition of its own. On Dec. 28, the chipmaker announced it had finalized the $16.7 billion acquisition of San Jose, Calif.-based Altera, a field-programmable gate array (FPGA) vendor. The companies first announced the deal on June 1.

Saddled with big data, and anticipating even greater volumes of data with the advent of the Internet of Things (IoT), businesses are growing increasingly interested in using FPGA processors. Unlike x86 server chips, FPGAs can be reconfigured to perform a specific task, wasting few if any compute cycles on unnecessary processing.

For Intel, Altera’s FPGA technology will help the company usher in a new generation of server chips for the data center.

“Within the data center we see an opportunity to combine our Xeon microprocessors with FPGAs to significantly improve performance, and through integration, reduce the cost,” said Brian Krzanich, CEO of Intel, in a June 1 conference call. “That combination will position us to address emerging workloads in creative new ways, adding value to our customers, and these are products that our customers have been looking for.” The first FPGA-enabled Xeons are expected to show up in limited quantities during 2016.

To address the exploding market for IoT technology products, Intel plans to integrate its low-power Atom chip technology with FPGAs, said Krzanich. The move will allow his company “to pursue segments that are now served primarily by ASICs [application-specific integrated circuits] and ASSPs [application-specific standard products], spanning our serviceable market by roughly $11 billion. Combined, we expect these product synergies to drive roughly 60 percent of the value we create with this acquisition.”

Intel will continue to use Taiwan Semiconductor Manufacturing Company’s (TSMC) foundry for current Altera products. Intel intends to manufacture the new 14 nm Stratix 10 product line and other products going forward.

Practically, Altera will live on as a new division within Intel called the Programmable Solutions Group. The unit is headed by Intel corporate vice president and general manager Dan McNamara, a former Altera vice president. “As part of Intel, we will create market-leading programmable logic devices that deliver a wider range of capabilities than customers experience today,” he said in a Dec. 28 statement.

Naturally, Intel isn’t the only tech heavyweight eyeing FPGAs.

IBM announced last month that it was partnering with Xilinx to expand the use of FPGAs in its Power systems. In August, reports began to surface that AMD was investigating FPGA accelerators for its Opteron server processors.

Pedro Hernandez is a contributing editor at Datamation. Follow him on Twitter @ecoINSITE.

Photo courtesy of Shutterstock.

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