skip to main content
Close Icon We use cookies to improve your website experience.  To learn about our use of cookies and how you can manage your cookie settings, please see our Cookie Policy.  By continuing to use the website, you consent to our use of cookies.
Global Search Configuration

Ovum view


Intel Corp. announced reaching a definitive agreement on the much-rumored deal to acquire Altera for $16.7bn, continuing the spate of semiconductor consolidation. Intel aims to use the acquisition to integrate programmable chips and processors, creating new classes of products, and to improve its data center and Internet of Things offerings.

Performance improvements targeted

Intel’s CEO Brian Krzanich highlighted chip performance improvements as an important element in the company’s decision to acquire Altera. Interestingly, he invoked Moore’s Law as an Intel driving force: to continue to deliver higher performance at lower power and cost. Some believe Moore’s Law is nearing its end because decreasing manufacturing nodes – that is, smaller feature sizes used to fabricate chips – substantially increase cost and power consumption. Nonetheless, integrating Altera’s programmable logic devices with Intel’s processors can deliver a new class of products, improve system performance, and drive development of some next-generation devices.

The data center server market is Intel’s profit engine, and continued performance improvement is paramount to future business. Intel believes it can improve server performance by a factor of two through chip integration. Applications such as facial recognition, encryption, and Big Data compression would benefit. But the integration is a two-step process: first co-packaging, to be available in late 2016, and then on-die integrated solutions.

The Internet of Things is a high-growth market that is still in its nascent stage. Intel is selective here and is targeting devices that require a high level of logic and processing. It highlighted advanced driving assist systems and plans to compete with application-specific integrated circuits, the incumbent technology for this application.

Intel estimates it can expand Altera’s core business by 7% annually. This will undoubtedly be a challenge, as Altera’s 2014 revenue was the same as in 2010. Altera does help Intel enter new markets, and Altera’s revenues did increase 12% in 2014 versus 2013. Nonetheless Intel must develop sustained growth to post a good return for its investment.


Further reading

“Avago to acquire Broadcom, affirming the importance of scale,” TE0017-000044 (May 2015)

“NXP-Freescale merger targets connected car, IoT opportunities” TE0017-000030 (March 2015)


Daryl Inniss, Practice Leader, Components

Recommended Articles

  • Enterprise Decision Maker, Enterprise IT Strategy and Select...

    2017 Trends to Watch: Big Data

    By Tony Baer 21 Nov 2016

    The breakout use case for big data will be fast data. The Internet of Things (IoT) is increasing the urgency for enterprises to embrace real-time streaming analytics, as use cases from mobile devices and sensors become compelling to a wide range of industry sectors.

    Topics Big data and analytics IoT

  • Service Provider Technology, Enterprise Decision Maker

    IT services required to smooth the path to automation

    By Kris Szaniawski 17 Jan 2018

    Ovum expects telecoms-specific IT services to be the fastest-growing segment of the telecoms vendor services market, not just this year but also over the next five years, with a CAGR of approximately 7% over the period.

  • Service Provider Technology, Enterprise Decision Maker

    T-Mobile US leverages big data analytics to improve VoLTE experience

    By Adaora Okeleke 09 Mar 2018

    At MWC 2018, network equipment provider Ericsson announced that T-Mobile US is using its Ericsson Expert Analytics platform to deliver improved quality of experience for VoLTE services, as well as for other mobile services.


Have any questions? Speak to a Specialist

Europe, Middle East & Africa team - +44 (0) 207 017 7700

Asia-Pacific team - +61 (0)3 960 16700

US team - +1 646 957 8878

+44 (0) 207 551 9047 - Operational from 09.00 - 17.00 UK time

You can also contact your named/allocated Client Services Executive using their direct dial.
PR enquiries - Call us at +44 788 597 5160 or email us at

Contact marketing -

Already an Ovum client? Login to the Knowledge Center now