Intel completes $16.7 billion deal for Altera

Chip giant Intel has completed its $16.7-billion mega-deal to buy Altera, to gain a slice of an emerging market for a new type of chip that was much more flexible than the microprocessors Intel is associated with.

Altera specialises in field-programmable gate arrays (FPGAs) capable of being re-programmed for new tasks. That agility was critical to the future of computing as it allowed companies operating data centres to re-purpose the devices on the fly rather than having to replace or upgrade the hardware.

Intel's forte had been making the powerful but rather stodgy microprocessors that found application in traditional personal computers and servers. The chip is hard wired to perform a certain set of tasks.

Intel senior vice president Diane Bryant said in November, that it would ship the first chip to combine its own hot-selling Xeon microprocessor expertise with some of Altera's field-programmable smarts sometime in 2016.

FPGAs differ from traditional chips in that they could be programmed and reprogrammed using software and were becoming increasingly popular as ''accelerators'' in cloud computing and web-scale environments. In traditional computing environments, the 'high-performance computing' (HPG) sector used accelerators such as GPUs to boost performance while limiting power consumption.

However, newer workloads like data analytics and embedded systems, demanded faster processing, more flexibility and quicker results, fueling demand for FPGAs across the data centre.

The new Intel chips powered with Altera FPGAs are expected to arrive in early 2016. According to Intel the company intended to offer Altera FFPGA chips with Intel's XEON processors in customisable combinations. It also said it wanted to continue the work Altera was doing on FPGAs for ARM-based systems-on-a-chip (SoCs), which were still under development.