While continuing its expansion initiatives under the new CEO, Intel Corporation (NASDAQ: INTC) seems to be shifting focus to new growth areas to stay relevant in the highly competitive semiconductor industry. The chipmaker Tuesday acquired London-based tech firm Omnitek, which designs and manufactures programmable chips for video and artificial intelligence applications.
As per the terms of the deal, all the employees of Omnitek will join Intel’s Field-programmable Gate Array, or FPGA, business which is a part of its Programmable Solutions Group. Post-integration, the company will have access to Omnitek’s 200-odd FPGA IP cores and related software. Meanwhile, the financial terms of the transaction are not known yet.
The FPGA solutions of Omnitek are mostly used in professional video conferencing, broadcast, augmented reality & virtual reality applications, medical devices and defense applications. It is expected that together, the companies will bring about game-changing innovations in the field.
As per the terms of the deal, all the employees of Omnitek will join Intel’s Field-programmable Gate Array business
“Omnitek’s technology is a great complement to our FPGA business. Their deep, system-level FPGA expertise and high-performance video and vision-related technology have made them a trusted partner for many of our most important customers,” said Dan McNamara, SVP and general manager of the Programmable Solutions Group at Intel.
Related: Intel Corporation Q4 2018 Earnings Conference Call Transcript
The buyout assumes significance considering the steady increase in the use of FPGA in visual-related applications, especially among the enterprise and cloud service customers of Intel. In a similar deal, the company last year acquired fabless semiconductor company eAsic Corporation, a specialist in programmable microchips used in wireless devices. The addition of eAsic was in line with the company’s efforts to cater to the high demand for FPGA solutions.
Earlier this month, Wells Fargo (WFC) lowered its rating on Intel, citing the growing competition from rival chipmaker Advanced Micro Devices (AMD) and headwinds facing the semiconductor industry. The analyst cautioned that the first half of the current fiscal year will be challenging for Intel.
Intel shares are currently trading at the highest level in nearly nine years. After losing sharply during the recent tech selloff, the stock gained 22% so far this year. It traded higher during Tuesday’s regular session.