Almost a decade after it acquired the FPGA producer, Intel transforms it back into a standalone entity under its original brand name.
Intel spent $16.7 billion to purchase FPGA manufacturer Altera nine years back, marking its biggest buyout ever. Over time, Altera got gradually absorbed into the conglomerate. But by the end of last year, Intel decided to break away the FPGA division as an independent brand, managed by its own CEO.
The decision has now been implemented, with the Altera brand name being revived for the spin-off. Sandra Rivera, who is an Intel veteran and previously oversaw the data center division, is now leading the FPGA entity. Although it operates as a separate brand, it is still part of Intel and maintains its own profit and loss accounts.
Rivera, in a press briefing, speculated that Altera’s FPGA operation has an estimated total addressable market (TAM) of $55 billion over the “next few years”. This beholds a significant leap from the current $8 to $10 billion evaluations. However, she did not specify the exact duration of this period.
Rivera conveyed that efforts are underway to cultivate relationships with Intel’s channel partners to enlarge Altera’s portfolio for a wider range of applications and uses. Up until this point, FPGAs, sold under the Agilex brand, targeted the mid-range and higher end of the market. However, Intel is now venturing into the lower market sectors with the introduction of the Agilex 3 product line.
“Our growing portfolio enables us to offer products and cater to markets from the extreme higher-end that demand power, performance, and features, to even the most cost-sensitive, power-constrained, and space-constrained scenarios,” stated Rivera.
Rivera has a proven success record. In 2021, the newly appointed CEO Pat Gelsinger entrusted Rivera with the responsibility of the data center and AI (DCAI) group. Notably, this was the same group that Gelsinger used to lead before he was dismissed from Intel in 2009. At the time, the direction of DCAI was unclear, and the highly-anticipated Xeon processor, dubbed Sapphire Rapids, was facing severe delays. Under Rivera’s leadership, Intel was able to successfully launch the Sapphire Rapids and properly align the timeline for its successor, Emerald Rapids.
A few months ago, Intel decided to change the branding of the Agilex line to align with that of its Core desktop and mobile processors. The new branding categories include Agilex 3 at the low end and the progressively higher performing Agilex 5, 7, and 9.
Agilex 9 is currently in mass production, while Agilex 7 F-series and I-series devices have also hit production. Intel’s Agilex 5 is broadly available now, boasting 1.6x greater performance per watt than competing products. Look out for Agilex 3, a low-end, energy-efficient FPGA line designed for simple functionality for cloud, communications, and smart edge applications.
This move contrasts with AMD’s strategy, which involved the acquisition of FPGA leader Xilinx in 2022 for a whopping $35 billion. AMD has seamlessly integrated the Xilinx team and their product line into its own offering, driving sales and impacting its bottom line.
Jim McGregor, a senior analyst with Tirias Research, reflects on Intel’s less than stellar track record with assimilating acquisitions, citing Mobileye and McAfee as examples. “Intel hasn’t exactly excelled when it comes to leveraging the companies it acquires. However, in the case of Altera, they’ve done a commendable job. Altera seems to be well-positioned for future success,” he points out.
According to McGregor, the shift in focus towards FPGA is indicative of Intel’s strategic alteration since Gelsinger stepped in at the helm. Intel now appears more interested in challenging the likes of TSMC in the foundry business, as opposed to AMD and Nvidia.
“Clearly, being a foundry is the primary focus for Pat and the new leadership team, alongside an emphasis on x86 architecture. Thus, the question is, where will continuing investment be directed, and what will the level of this investment be?”
MacGregor predicts a mutually beneficial technology transfer between Intel and Altera. In the early stages, Intel integrated Altera FPGA blocks, while Altera, in time, aims to incorporate more Intel technology into their products.
