Intel's Cray Acquisition Helps Some Areas, for Now

NEW YORK (Trefis) -- Last month semiconductor giant Intel (INTC) announced its acquisition of Cray's (CRAY) world-class interconnect personnel and intellectual property business for $140 million. Intel has been looking to build its high-performance computing portfolio through faster processors and quicker interconnects.

In July 2011, it bought networking vendor Fulcrum Systems in order to build its data center portfolio, and in January 2012, it acquired InfiniBand assets from QLogic (QLGC) to build a chip-to-chip and server interconnect.

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Cray, a global leader in supercomputing, provides innovative computing platforms and has made a name with its XT5-HE supercomputer (also called Jaguar), touted as the third-largest supercomputer in the world, according to the Top 500 list of fastest supercomputers, issued in November 2011.

Intel has entered into a definitive agreement with Cray to acquire certain assets related to its high-performance computing (HPC) interconnect program, which is an important segment of the server market. The transaction, expected to close by the end of the current quarter, provides exceptional strategic assets and further enhances Intel's HPC portfolio.

After a huge market share loss in 2006, Intel bounced back with its Xeon processors and currently leads the server market with a share close to 95%. Cray's assets are expected to drive up its server processors performance while reducing power consumption.