Altera's Latest FPGA Platform

Recently Altera Corporation (ALTR - Analyst Report) declared that its clients can now access its latest Cyclone V GX FPGA development kit. The kit, which is considered as the first 28 nanometer(nm) development kit in the market, is especially designed for high-volume applications, such as industrial networking, surveillance cameras and automotive infotainment systems.

The new product has various features including FPGA boards, development software, reference designs and documentation. Management averred that, with the help of this new platform, clients will be able to easily increase the efficacy of their products with less time spent on designing. In addition, the latest kit would heighten the integration process of programmable logic devices (PLDs) and ASIC facilities and will also offer a unique low-power and minimized cost solution to customers.

Altera manufactures a wide array of products such as programmable logic devices (PLDs),which consist of field-programmable gate arrays (FPGAs) and complex programmable logic devices (CPLDs). These are standard semiconductor integrated circuits or chips, which customers program to execute required logic functions in their electronic systems.

Altera has a pipeline of 28 nanometer products, which it believes will maintain growth momentum in future. In the second quarter of 2012, Altera registered growth in the 28nm products. 28nm products grew 166% sequentially. Altera expects revenue from this node to exceed $20 million in the third quarter of 2012.

Altera’s main rival is Xilinx Inc. (XLNX - Analyst Report). Together, they hold nearly 87% of the PLD market. However, the company has a strategic advantage over Xilinx regarding its HardCopy offering (a new type of high performance application-specific integrated circuit for which Xilinx does not really have a competing product).

The current Zacks Consensus Estimates for the third quarter of 2012 and for 2012 are 46 cents and $1.79 per share, representing year-over-year growth of (19.78%) and (23.87%), respectively.

We currently maintain a ‘Neutral’ recommendation on Altera. The stock carries a Zacks #4 Rank, translating into a short-term (1-3 months) ‘Sell’ rating.