Intel's $16.7bn purchase of programmable chipmaker Altera is likely to be a model for future big acquisitions at the company as the semiconductor industry's merger boom continues, according to the US company's chief dealmaker.

Altera has disclosed the industry's first heterogeneous System-in-Package (SiP) devices that integrate stacked High-Bandwidth Memory (HBM2) from SK Hynix with high-performance Stratix 10 FPGAs and SoCs.

World No. 1 chipmaker Intel gained unconditional EU antitrust approval on Wednesday for its US$16.7 billion bid for Altera, its largest ever acquisition.

Altera has developed a storage reference design based on its Arria 10 SoCs, which doubles the life of NAND flash and can increase the number of program-erase cycles by up to 7X compared to current NAND flash implementations.

Xilinx CEO Moshe Gavrielov is trying to take advantage of increased interest in his company since Intel said it would acquire his main rival in the programmable logic-chip market for US$16.7 billion.

Altera has been a key customer at TSMC for years, especially at the advanced tech node, accounting for around 3% of TSMC's revenue at 20/28 nodes.

Cadian Capital Management and TIG Advisors are among Altera shareholders that have sent letters to the company's management, urging them to return to the negotiating table with Intel, people with knowledge of the matter said.

The volumes of the FPGA market are tiny by comparison to Intel's computer markets. Some have questioned a deal that would require spending as much as $13 billion to acquire just less than $2 billion in annual revenues.

Intel is in advanced talks to buy chip partner Altera, according to people familiar with the matter, a move that would represent the semiconductor giant's biggest-ever acquisition.

The company formed a foundry business about three years ago, but until recently its customers have been tiny companies.

Altera posted revenue slightly below expectations in the first quarter and the programmable chipmaker said it was beginning to see a recovery from a dip in demand from its communications and industrial customers.

For 30 years Altera has used the same, sole-sourced foundry - TSMC. Recently it announced it would be going to Intel for sole-sourced foundry at the 14nm generation. Isn't this a risk?

Altera has agreed to acquire TPACK, a wholly-owned subsidiary of Applied Micro Circuits. TPACK delivers complete FPGA-based OTN (optical transport network) products targeting packet and optical networking equipment suppliers.

The architectural, software and process innovations Altera is making at 20nm enable the development of an enhanced mixed-system fabric that delivers new levels of performance, bandwidth, integration and power efficiency.

Chipmakers Texas Instruments and Altera have both cut their forecasts for the fourth quarter.

Programmable logic vendor Altera has reported third quarter sales that came in below analysts' expectations and the company's own revised guidance, with CEO John Daane saying customers are burning through existing inventories in a manner reminiscent of the downturn of 2008.

The company's revenue outlook for the current quarter was also higher than what Wall Street anticipated.

With the acquisition of Avalon Microelectronics, Altera is allowed to expand its portfolio of customizable IP solutions for OTN (Optical Transport Network) applications, supporting data rates at 1.2G, 2.5G and 10G, as well as 40G and 100G.

Intellectual Ventures has filed patent lawsuits against nine tech companies. The first lawsuit targets software security vendors Symantec, McAfee, Trend Micro and Check Point. The second lawsuit targets DRAM and flash memory vendors Hynix and Elpida. The third names FPGA vendors Altera, Lattice and Microsemi, which recently acquired Actel and its FPGA business.

Altera, which along with competitor Xilinx dominates the programmable logic chips market, said it was increasing its 2011 R&D budget by 26% to US$330 million as it introduces a new generation of chips. It will ship a 28nm microchip in the first quarter, and announce more 28nm chip families during 2011.

ZTE, one of China's largest network equipment and phone suppliers, is set to buy US$3 billion worth of semiconductor components from five US technology vendors. It has signed the purchase agreements with Qualcomm, Texas Instruments, Freescale Semiconductor, Altera and Broadcom.

Programmable chipmaker Altera has forecast its sales would grow in the fourth quarter as China expands its wireless telephone infrastructure but some analysts warned that revenues could slow next year.

"With the Embedded Initiative, Altera is enabling designers in markets such as automotive, industrial, military and wireless to easily leverage a rich ecosystem of processor, OS and IP support all through a single design flow, and to reduce overall system cost..."

Altera has announced that its revenues for the third quarter are now expected to grow 10-14% on quarter. The company's prior guidance was for sequential growth of 4-8%.

Following a third consecutive record-breaking sales quarter reported by Xilinx Wednesday (July 22), at least one Wall Street analyst reiterated his contention that extending lead times by the leading FPGA supplier put it at risk of double ordering.

Programmable logic vendor Altera set a new all-time high in quarterly sales in the second quarter of 2010. It also beat consensus analyst expectations for sales and net income during the quarter.

Altera has enhanced its Arria II GX FPGA variant with 6.375Gbps transceivers and up to 1.25Gbps LVDS support, while broadening the reach of the family with the addition of the new Arria II GZ FPGA variant. The company claimed its 40nm Arria II family provides the lowest power 6Gbps transceiver solutions shipping today, featuring up to 50% lower static power over competitive devices.

The solution features Altera's low-cost Cyclone III or Cyclone IV FPGAs, and IP from Eyelytics and Apical supporting AltaSens' 1080p60 A3372E3-4T and Aptina's 720p60 MT9M033 HD wide dynamic range (WDR) CMOS image sensors.

Altera has announced it is shipping in production the highest density member of its 40nm Stratix IV FPGA family. Featuring 820K logic elements, the device is for a variety of high-end applications including ASIC prototyping and emulation, wireless, wireline, military, computer and storage.

Altera now expects second-quarter revenues to be at the high end of previous guidance, growing 10-12% sequentially.

Altera has reported net profits of US$153.2 million for the irst quarter, compared with profits of US$44.0 million a year earlier. "We are benefiting from growth in our 65nm and 40nm FPGAs as customer designs transition from prototyping into production," said company CEO John Daane.

The big news at Xilinx' annual analyst day on February 22: A new partner for foundry services at the 28nm node.

In addition to Intel acquiring an FPGA vendor, other acquisitions could be possible including Analog Devices buying a power management IC company and Microchip Technology buying a company to expand its presence in the microcontroller market.

Intel may look to acquire an FPGA supplier such as Xilinx or Altera in 2010 in an effort to expand its presence in the embedded market as well as SoCs, according to a Wall Street analyst.