Giant chip-maker Intel is is acquiring Altera in a $16.7 million transaction that will make the San Jose logic device maker a business unit of Intel.
The deal, announced Monday, gives Altera shareholders $54 a share. It still must be approved by Altera shareholders.
Intel was clear about why the deal was done – Altera, based in San Jose, will add strength to the Intel s server chip business, and help it gear up for the burgeoning Internet of Things, in which computer intelligence is added to myriad hum-drum devices like appliances and cars.
The acquisition will help Intel enable new growth in the network, large cloud data centers or IoT (Internet of Things) segments, our customers expect better performance at lower costs, said Intel CEO Brian Krzanich in a statement.
Intel s growth strategy is to expand our core assets into profitable, complimentary market segments, he added.
The deal is another in a string of mergers and acquisitions reshaping the semiconductor industry. Last week Avago Technologies, a Singapore-based chip company with operations in the U.S., announced the $37 billion acquisition of Broadcom, a venerable Irvine-based chip company.
The acquisition eclipses the $7.6 billion Intel paid for McAfee in 2010.
Altera, with 3,000 employees in 19 countries, invented the programmable logic chip, also known as a Field Programmable Gate Array, or FPGA in 1984.
The chip is programmable by customers after purchase, and has enjoyed a steadily increasing demand. Recently, some large data server operations have begun using more FPGAs to take over some tasks once handled by processors like Intel s.
Photo: Intel headquarters (Photo courtesy Intel)
