Analyst comments on Altera's 40-nm FPGAs

SAN JOSE, Calif. -- Altera Corp. today is expected to become the first field-programmable gate array vendor to announce a family of 40-nanometer FPGAs and ASICs.

What do the analysts think of Altera's new lineup?

''Very impressive announcement on two fronts,'' said Bryan Lewis, an analyst with Gartner Inc. The products beat ''Xilinx to the punch, and second, the level of transceiver support is outstanding and should really help them in the communications market.''

The is a key for good reason. ''About 45 percent of the total FPGA/PLD revenue comes from communication applications and the vast majority of high-end FPGA devices go into communications,'' Lewis said.

''This new 40-nm offering should help Altera develop new markets, especially in communications,'' he said. It also ''has the potential to finally give Hardcopy a substantial revenue boost. Altera's Hardcopy ASIC revenues in 2006 and 2007 were relatively low.''

Gartner estimates Hardcopy sales were at $43 million in 2006 and $48 million in 2008. In total, worldwide FPGA/PLD revenues in 2007 were $3.5 billion and is forecast to grow 7.5 percent in 2008 ($3.8 billion) and grow 10.8 percent in 2009 ($4.2 billion), according to Gartner.

The ASIC market, in contrast, is about a $25 billion market in 2007, and expect to grow 2.9 percent in 2008, and 3.3 percent in 2009, according to the firm.

Finally, what are the challenges for Altera--and Xilinx--going forward? ''Most of the future growth for the FPGA market is in low-cost product families such as Cyclone and Spartan,'' he said. ''The big questions in my mind is when will Altera offer a 40-nm Cyclone product and when will Xilinx announce its first 65-nm Spartan product? Altera may not feel the need for a 40-nm Cyclone device yet given they have had 65-nm Cyclone 3 out for a while and Xilinx still has not answered with its 65-nm Spartan family.''