Intel plans to combine Altera’s field-programmable gate array (FPGA) devices with its own Xeon family of server chips to create highly customized and integrated new types of devices. According to Intel, "The combination is expected to enable new classes of products that meet customer needs in the data center and Internet of Things (IoT) market segments."
The company also expects to be able to use its device manufacturing process to enhance the Altera products through design and manufacturing improvements. Altera will become an Intel business unit and Intel does plan to continue support for Altera products that have been developed running on the ARM processor architecture.
The deal is seen as a way for Intel to defend its presence in the data center market, considered its most profitable business. At the same time it is expected to open up other opportunities in growth areas. Altera devices are used in a wide variety of markets, including communications, computer and storage, industrial and consumer applications.
According to reports, Altera previously rejected a similar buyout offer from Intel in April, but talks resumed last month. The transaction is expected to close in six to nine months. Intel expects the deal to add to its earnings per share in the first year after the deal closes.