Semiconductor chip giant
) recently took over privately-held power converter chip maker
Enpirion Inc. for a cash consideration of roughly $141.0 million.
Altera expects to wrap the transaction by the end of second
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U.S.-based Enpirion is a fabless supplier of analog power
management solutions. Enpirion's PowerSoCs (System on Chips)
portfolio features high-frequency switching, magnetics,
integrated inductors and packaging. The company ships its
products into communications infrastructure, enterprise,
industrial and storage end markets.
With the acquired capability, Altera will be able to offer more
comprehensive, high performance, low power consuming (the usage
of low-noise switching regulators can reduce power consumption by
50% in select applications), lower footprint FPGA
(Field-programmable gate array) chips. In addition to this,
Altera will be in a position to compete with analog semiconductor
companies such as
Texas Instruments Inc.
Linear Technology Corp.
), who have strong foothold in the power management solutions
Altera expects the acquisition to add $6.0 million in operating
expenses in 2013. Revenues from the unit are expected to be
approximately $12.0 million for the rest of 2013. However, given
the growing demand for power management chips, Altera expects
revenues of roughly $35.0 million in 2014. The acquisition will
not materially impact earnings per share in 2013 and 2014.
Altera's incessant endeavour to enhance its FPGA portfolio will
help it to gain share in the PLD (Programmable logic device)
market. Altera has also joined forces with chip giant
) for its transition into 14 nanometer (nm) chips.
Apart from this, Altera acquired TPACK, a wholly-owned subsidiary
of Applied Micro Circuits Corp., for a cash consideration of
$34.0 million. With TPACK, Altera aims to strengthen its position
in the OTN (optical transport network) equipment market that is
anticipated to reach $13 billion by 2017, according to research
firm Infonetics. The acquisition shows Altera's intention to
expand its presence in the booming OTN market, in addition to the
Despite Altera's growth potential, we prefer to remain on the
sidelines given Xilinx Inc.'s leadership in the 28 nm nodes,
volatility in semiconductor market and soft telecom market.
Currently, Altera has a Zacks Rank #3 (Hold).