• by Laurie Sullivan , Staff Writer @lauriesullivan, June 1, 2015

What the heck does "Altera" do? If you don't know the company, pay attention -- because Google likely will. Altera designs chips that go into phones and cars. In tech speak, one might describe the hardware as programmable semiconductors used in a variety of devices that can be configured by a car manufacturer, for example, to carry out a variety of tasks. Intel announced Monday that it will acquire Altera for $54 a share in an all-cash transaction valued at approximately $16.7 billion, allowing it to expand into smart cars and other technologies, such as those connected to digital advertising if it chooses.

Altera's chip designs are suited for data storage and processing tasks, including in phones and cars. Google needs to acquire a semiconductor designer and manufacturer. Now there is some question whether Altera's rival, Xilinx, will sell. Both companies are fabless semiconductor manufacturers, which means they don't actually manufacture the chip, but they do design the products. It's reminiscent of Google's most recent deal with Levi's, where the two companies will partner to create smart materials. 

It's also reminiscent of Verizon's recent acquisition of AOL. Who would have thought that a telecommunications carrier would want to acquire an online portal for its programmatic ad-serving technology? Telecom carriers are finding they can play a niche in online mobile advertising, as we should expect to read about Tuesday with a forthcoming announcement, per sources.

I'm brainstorming here. Think of Altera's programmable technology, similar to Google new feature Now on Tap, the expected release with the Android M OS. It allows Google Now, a dashboard of notifications focused on a person's life and interests, to plug in as a layer running on a phone or a tablet. It also takes a person from the home page on their phone into a page on a Web site or in an app.

Programmable semiconductors work the same way for hardware, transferring functions from the Internet to material things. Some of the functions are comparable, not all. This could become one way to extend advertising, paid-search, and triggers to inanimate objects connected through the Internet.

Analysts like Raymond James' Hans Mosesmann, who follow Altera, focus on the company's chips to support data centers, but with Google's interest in cars, smart fabrics, robotics, and other technologies I see a need for the company to one day acquire a fabless semiconductor manufacturer.

Some of this might be a stretch--just food for thought with a side dish of semiconductor to boot.