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Altera, Xilinx to run neck and neck by 2012, says analyst

Posted: 14 Mar 2011 ?? ?Print Version ?Bookmark and Share

Keywords:28nm? ASSP? embedded?

An analyst has predicted that Altera Corp., currently ranked No. 2 in the programmable logic market, would gain pace and equal reigning leader Xilinx Inc. in terms of quarterly sales by early 2012.

Hans Mosesmann, an analyst with Raymond James & Associates Inc., believes that Altera, with its portfolio of FPGAs for high-, mid- and low-end markets, is poised to penetrate the ASSP and embedded markets in addition to the ASIC segment.

Altera posted sales of about $1.95 billion in 2010. Xilinx had sales for calendar 2010 of nearly $2.3 billion.

Both Altera and Xilinx are trying to grow market share outside of the traditional programmable logic market at the expense of ASICs, ASSPs, DSPs and other devices.

According to Mosesmann, Altera is targeting a total market of nearly $50 billion, more than 10 times the size of the programmable logic market.

Mosesmann said Altera's 64 percent growth in 2010 was driven mainly by sales of 65-, 90- and 130nm products. Altera's 40nm products are still in the early phase of production, Mosesmann said.

Mosesmann added that 2010 was the first time that less than 20 percent of the company's sales came from products at the 150nm node or above. Xilinx captured roughly 80 percent of the market for 150nm and above products, he said.

Mosesmann said Altera's approach to 28nm products strikes him as more powerful in terms of performance and cost.

Altera has said its high-end 28nm Stratix V products would begin sampling this quarter, while its mid- and low-end Arria and Cyclone 28nm devices are expected to begin sampling late this year and early next year, respectively. Altera executives say the company's 28nm product portfolio is the broadest ever deployed by an FPGA vendor.

Xilinx has also said it would sample its first 28nm series 7 FPGAs this quarter. The company will offer three classes of devices at 28nm, up from two classes at previous nodes. The Xilinx 28nm devices also feature a scalable architecture to enable customers to migrate 28nm designs between the product families much more easily than has previously been possible.

Mosesmann said a unified approach like Xilinx is taking, with a single architecture for all segments, has the ease-of-use advantage for potential rapid adoption. However, this approach could cost Xilinx in terms of gross margin at certain segments of the market, such as the low end, Mosesmann said.

"It's too early to say how 28nm will fair for both Altera and Xilinx," Mosesmann wrote in a report circulated last week. "However, what we can say with confidence is that we believe both will continue to be successful in gaining share [versus] ASIC and ASSP solutions for many years to come."

Mosesmann maintains a "strong buy" rating on Altera's stock and an "outperform" rating on Xilinx's stock.

- Dylan McGrath
??EE Times

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