The Wall Street Journal recently reported that Intel Corporation (NASDAQ:INTC) is planning to acquire Altera Corporation (NASDAQ:ALTR). If this is the scenario, it shall prove to be one of the biggest deals of Intel. While the chip-making business of Intel dominates the industry of servers at the market percentage of 98%, acquiring Altera will give it furthermore dominance in this arena.
Intel’s Biggest Deal: Well Worth
According to Patrick Moorhead, a technology analyst, the deal is worth every single penny. This is so because it will enable Intel to safeguard its biggest money-minting option, i.e., the servers.
The rumours about this deal have paved way for other companies to start plugging in the Altera- Xilinx, Inc. (NASDAQ:XLNX) made FPGA chips or Field Programmable Gate Array chips in the data centers. Now the advantage of these chips is that, not only are they reprogrammable, but can also help in performing a few kinds of tasks faster than the ones of Intel.
Baidu Inc (ADR) (NASDAQ:BIDU) and Microsoft Corporation (NASDAQ:MSFT) for example, have already started making use of these FPGA chips in combination with the processing chips of Intel, so as to derive the best of both.
The FPGA Advantage
The clear cut advantage to Intel from this deal would be that of FPGA. Even though Intel manufactures the FPGA chips of Altera already, but the acquisition will enable it to integrate the FPGA facility on its own chips, thereby extracting better performance.
Possible cause of deal
Apart from the FPGA advantage, Intel’s possible mindset behind this deal could be that companies having huge servers, such as Baidu and Microsoft, might think of integrating ARM-based processing chips with FPGAs, which might threaten the domination of Intel’s x86 in the industry of servers.
Effect on others
This deal would mean that Xilinx shall be the primary FPGA chipmaker in server’s field. This would imply that Xilinx shall become the most important target of acquisition by the other companies.