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Intel is reportedly in talks to buy Altera, a programmable chip maker that is valued at $10.4 billion in the stock market, the Wall Street Journal reported.

We’ve reached out to Altera and Intel for comment; both declined to comment. But a combination could make sense, as Intel has been looking into ways to combine microprocessors, custom chips, and flexible arrays that can take updates at the last minute. Altera specializes in the such chips, which the industry calls field programmable gate arrays (FPGAs).

Meanwhile, analyst Patrick Moorhead told us, “Two things have happened in the industry that make this deal make sense. First, we are moving into a world of heterogeneous computing where we need more specificity in the way we do processing.  We aren’t moving as quickly as we once were in homogeneous processing. FPGAs, like graphics processing units (GPUs) and digital signal processors (DSPs) are more specific kinds of more application specific processors, but FPGAs have been historically way too large and extremely difficult to program. You’ve heard Nvidia, AMD and Qualcomm talk about GPUs and Qualcomm about DSPs.”

He added, “Intel has helped solve the size issue by fabbing FPGAs on 14 nanometer production, the smallest node out there, not some huge 28nm process. Intel also announced that they would integrate FPGAs into some of the Intel Xeon processors, so they could accelerate certain programs better. Essentially, this is Intel embracing heterogeneous computing in a very big way.”

Altera’s main rival is Xilinx, but we also recently wrote about a new startup in the same business, Flex Logic.

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