Intel to Buy Altera in Effort to Grow Cloud, IoT Work
The $16.7 billion deal enables Intel to integrate FPGAs into Xeon and Atom chips, expanding its capabilities around cloud workloads and IoT devices.Intel is finally pulling the trigger on Altera, buying the programmable chip maker for $16.7 billion in a bid to bolster its efforts in the data center and Internet of things and accelerating a wave of consolidation in a volatile semiconductor market. After months of speculation and on-and-off negotiations, Intel officials announced June 1 that the giant chip maker will pay $54 per share for Altera, an Intel partner since 2013 that builds field-programmable gate arrays. FPGAs can be programmed through software and are becoming increasingly important accelerators for cloud and Web-scale environments by improving performance and holding down power consumption. Intel executives expect the deal to close within six to nine months, after which Altera will become a business unit within the company. The boards of directors of both companies have approved the deal, according to Intel Executive Vice President and CFO Stacy Smith. During a conference call to talk about the deal, Intel CEO Brian Krzanich said Altera fits within his company's business strategy of using its core strengths to expand into complementary markets. In this case, Intel will not only be able to leverage Altera's technology and expertise to grow its capabilities in cloud environments, but also will be able to expand its reach in the burgeoning Internet of things (IoT).
"This acquisition is a perfect example of our strategy," Krzanich said. "We can make the next generation of processors not just better, but be able to do more."