Intel announced a new board that will provide oversight for car hacking security. (Photo : Reuters)
Intel Corp, the world's biggest microchip maker, has agreed to buy FPGA-specialist Altera Corp in a $16.7 billion deal. Due to a PC demand decrease, Intel Corporation is boosting its product line by adding microchips used in data centers, which have a higher profit margin.
The Intel-Altera deal allows the former to bundle its microprocessor chips with the latter's
Programmable Logic Device (PLD) chips. Such PLD chips can speed up Internet searches.
The microchip king will particularly benefit greatly from Altera's experience in Field Programmable Grid Array (FPGA), according to Anandtech. Intel hopes to integrate some FPGAs into future products.
Altera is one of two major producers in the FPGA sector, with Xilinx being its major rival. Before the sale, Altera was already using an Intel chip in its latest Stratix FPGAs.
Intel said that it will offer $54 per share for Altera stocks, according to Reuters. This is a 10.5 percent increase to Altera's closing price on Friday.
Altera's stock value at the Wall Street closing bell indicates that some investors were worried about regulatory issues related to the Intel-Altera deal. However, financial analysts argued that the product overlap between the two tech companies was minimal.
The deal price reportedly equaled Intel's unsolicited offer to Altera in April. Altera rejected that offer.
Intel CFO Stacy Smith told Reuters that the big deal will provide consumers with microchip products that are better-performing, more versatile, and cheaper. That made the buyout "pretty exciting."
Intel had considered purchasing other major chipmakers before deciding on Altera. However, Altera created the most value for Intel shareholders.
Intel's shares fell around 1.7 percent to $33.86 on Monday.
