Well*3 (Because saying “Well, well, well is too mainstream), now here’s something interesting. Chip manufacturer Intel is expected to announce acquisition of Altera sometime today. An acquisition worth a little over 17 billion USD to be a bit more precise.
It’s true that “The world’s biggest chip maker” hasn’t really made a big acquisition for some time now, but this deal does show that the semiconductor industry is indeed riding through a wave of consolidation. One that seemingly is set to remake Silicon Valley, and along with it, a 335 billion USD chip industry.
With regards to the actual acquisition, Intel is slated to pay approximately 54 USD per share to Altera stockholders. This is after repeated attempts to close the deal since March. Reportedly, the new price is approximately 56% higher than the initial trade beforetalks began in March. As such Altera’s shares closed at 48.85USD on Friday (26th).
Intel is known for processors and memory for PCs, servers, and mobile devices whereas Altera is all about field programmable gate arrays (FPGAs). These chips possess the ability to be programmed for different functions, even at the very last minute and that level of flexibility is what makes them more expensive. Since there has been an increase in the amount of customers who use these chips within servers to improve overall system performance, it’s possible that that’s why Intel sees them as a worthy acquisition for its future.
In other news, Avago Technologies (who provide the sensors for most gaming mice) have been planning to buy Broadcom for 37 billion USD and Summitview Capital, a Shanghai-based company has said that they plan to buy ISSI (Integrated Silicon Solution Inc), a manufacturer of memory, microcontroller, and bluetooth interface ICs for 640 million USD. Lattice Semiconductor bought Silicon Image for 600 million USD in March. Finally NXP bought Freescale for $11.8 billion.