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Intel's M&A history: Should it worry Altera?

Posted: 18 Aug 2015     Print Version  Bookmark and Share

Keywords:Altera  Intel  M&A  FPGA  acquisition 

Intel actually spent years paying a lip service to the significance of the growing non-PC business. If you read Intel press releases over the last two decades, in every occasion when Intel acquired communication/networking chip companies, Intel explicitly vowed its commitment to the non-PC market.

Strauss blames the failures of Intel's earlier communications acquisitions on "the PC-centric management mentality of Intel mid-level managers." He said, "Only organic growth can change the internal mentality to a communications-centric mentality. Acquiring other companies simply won't automatically bring in the required mentality."

Mixed record

While many analysts view Intel's M&A activities as "a mixed record," Intel insists that recent successes are not limited to acquisitions of software companies but also hardware vendors.

As examples, Intel's spokeswoman listed: Texas Instruments' cable modem business (2010) and Lantiq, formerly Infineon's wire line business unit (2015). "Our cable gateway business is going very well," she said. Other examples include: Mindspeed carve-out assets (2014) and Axxia business from LSI (2014). "They add to Intel's data centre group portfolio for networking and telco," she noted.


Now, back to Intel-Altera.

Moorehead is pretty confident that the Intel/Altera merger will succeed. He pointed out, "Intel has done a fine job balancing the needs of ARM and X86 with Wind River Systems, and I am expecting that Intel will need to do the same with Altera."

Noting that Intel CEO Brian Krzanich has committed publicly to keep investing in an ARM-based solution after the acquisition, Moorehead said, "Intel has also expressed the desire to keep the discrete card and chip-based FPGA business going as well as finding new ways to integrate FPGAs into Intel chips, either on-package or on-die." In short, he summed up, "This appears as an expansion to me, not a contraction."

Brookwood remains more cautious. He noted, "Intel has had some success working with Altera as a partner in some arms-length joint Xeon/FPGA marketing programmes and technology developments, and they've also engaged with them on a 14nm foundry deal that has yet to result in a marketable product."

He concluded: "I'm not close enough to Altera to have any strong opinions on how its culture will fit with Intel's, but that fit will be a key determinant of the ultimate success of the deal."

To survive in Intel's corporate culture where Intel is "infinitely more comfortable with 'family' than doing the extra work necessary to cordially handle 'new relations,'" Doherty said, "Altera engineers and managers will require exceptional independence if they are to keep up their design and market momentum."

Asked about how Intel plans to integrate Altera, Intel said: "We're working to ensure a smooth integration. We want it to be seamless for Altera customers and employees, who we consider one of Altera's most important resources. We expect integration will be aided by our history of working closely together through our existing foundry relationship."

- Junko Yoshida
  EE Times

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