Today Intel has announced that they are buying Altera in an all-cash deal of $16.7 billion. The deal, having been rumored for a while now, will see Intel pick up Altera for their Field Programmable Grid Array (FPGA) experience, with Intel intending to both continue FPGA development and integrate FPGAs into some of their future products.

In the FPGA space Altera is one of the two major competitors, and alongside rival Xilinx the two companies comprise the bulk of the market. Prior to this sale Altera already had a close relationship with Intel, with Altera using Intel’s 14nm process for their latest generation of Stratix FPGAs.

As one of only a few external companies known to be using Intel’s 14nm process, Altera’s FPGA’s have been a natural complement to Intel’s ASIC business. On a business side there’s minimal overlap, but more importantly on the technical side FPGAs are good candidates for early production on a lower-yielding node. Since FPGAs are just large arrays of programmable logic and RAM, they can easily compensate for defects, allowing for a greater number of chips to be shipped for revenue early-on than a more complex ASIC.

Given Intel and Altera’s already close working relationship, today’s deal was not unexpected. Purchasing Altera allows Intel to bring their FPGA production entirely in-house, not just producing FPGAs but better aligning them to Intel’s development plans as part of their integrated device manufacturing model. However more significantly, this gives Intel access to top-tier FPGA technology, which they can use to augment other products.

Intel is already talking about the possibilities they see for Altera’s FPGA technology in the IoT and datacenter markets, but also the company has confirmed that they will be integrating FPGA technology into some of their future Xeon products, to allow customers to essentially build-out semi-custom processors via the FPGA component. Intel already does on-package FPGAs for certain customers, so this would represent the logical extension of that process by bringing the FPGA fully on-die.

For Intel this also represents a chance to further branch out in the markets they cover. The PC and server market has continued to treat the company well, even as PC sales have slowed, but having so far struggled to capture a major piece of the mobile space from ARM and its partners, Intel has been looking at other avenues of growth. In this case FPGAs represent a high-margin business on their own, one that’s increasing in revenue as ASIC development costs continue to rise, and a good match for Intel given their traditional manufacturing advantage.

Source: Intel

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  • fluxtatic - Tuesday, June 2, 2015 - link

    I think you might be the only person on the planet that feels that way.
  • ShieTar - Tuesday, June 2, 2015 - link

    I would have agreed yesterday, but I read a benchmark article on the new HD6200 this morning. Now Intel manage to completely embarrass AMD on the iGPU side of things as well.
    So their own brand of GPUs, with their advanced manufacturing node, is beginning to sound like an interesting proposal.
  • benedict - Tuesday, June 2, 2015 - link

    Intel cannot be competitive on the discrete GPU market given the very high margins they are used to. They'd have to sell entry level GPUs for 200$ to keep in line with their CPU line.
  • ExarKun333 - Tuesday, June 2, 2015 - link

    $200 discrete GPUs will be the only ones around in a year or two. Anything not pushing 150w+ for graphics will be marginally better than iGPUs on-die. The market is changing and GPU prices are already adjusting. Entry-level $200, mid-range $350, flagships $500-650 and halo $999. Remind anyone else of CPU prices? :)
  • iamkyle - Wednesday, June 3, 2015 - link

    They already tried this once.

    Google "Intel i740".
  • w_barath - Friday, June 5, 2015 - link

    No, IGP is the future. That should be obvious when you look at the track record of IGP vs Discrete. IGP has been growing in leaps and bounds while staying within sane thermal and cost boundaries. Discrete has been prostituting TDP and raping consumer wallets more and more for a smaller and smaller performance advantage. IGP is now competing with 3-4 generation old Discrete, and we're approaching a point where Discrete is going to have to start shipping with water cooling to keep ahead, and radical, costly, new memory technologies to mitigate system bus bottlenecks - by putting 16GB with 1024 bit or wider busses - to compete favourably against IGP. And shortly after that, they will implode.
  • Senti - Tuesday, June 2, 2015 - link

    Would be awesome to have Skylake-E with FPGA... but we all know that with current level of competitions it'll be limited only to few extremely expensive server CPUs.
  • ZeDestructor - Tuesday, June 2, 2015 - link

    So around 4 years delay before I can lay my hands on them... I don't mind...
  • k2_8191 - Tuesday, June 2, 2015 - link

    I hope this move leads to inexpensive reconfigurable processors, especially ones integrated to CPU.
    That will be one of few ways to improve performance of general applications other than parallelization and process shrinking.
  • w_barath - Friday, June 5, 2015 - link

    The main problem with reconfigurable processors is that adding a reconfiguration fabric increases latency, which increases pipeline depths, which increases flush costs, which lowers instructions per clock and leads to an overall slower compute performance.

    Also, recognise that today's processors are already highly reconfigurable. Between programmable microcode, SIMD, and CISC instruction architecture, there's already tremendous flexibilty in what the core can do in response to a small amount of input code. This is one of the reasons X86 has remained king, and even ARM and MIPS run largely CISC-like code now. But even if you ignore the direction ISA's have taken over the last 2 decades, consider that even Intel - king of the kings - has added specialized GPU cores onto almost all of their current CPU dies. We're already on a road that's littered with heterogenous compute devices. How much more configurable do you really feel our compute devices need to become? LOL

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