FPGALover

Xilinx vs. Altera: Which Is the Real Growth Stock?

Your investment decision should be made based on your time horizon. The challenge with the PLD business is that it takes 5 years from the time a decision is made to build a new chip and the time revenue ramps up. At least two years to introduce the new chip and another 3 years for customers to accept the new technology, build it into their complex systems (that thus require PLDs), qualify those systems, and sell them to their end customers. With this in mind, what we're seeing today is the impact on revenue of their 90-nm lines where Xilinx screwed up handsomely with Virtex-4. 65-nm was introduced in 2006 where Xilinx, for a full year, reaped up design wins with no real competition. It was Altera's time to screw up with Stratix III. Which means that sometime in 2009 the revenue trend should reverse. To reverse once more two years later when 40-nm technology ramps up into volume production, where Altera probably has an edge, thanks to TSMC... Nothing rocket science here.

But keep in mind that in the long term, the market cap of these companies tend to trade in a somewhat narrow channel...