Intel is buying eASIC, a privately held programmable chip company based in Santa Clara, California. The company’s entire 120-member team and CEO Ronnie Vasishta will become part of Intel’s Programmable Solutions Group headed by Dan McNamara. Terms of the deal were not disclosed. Intel plans to close the acquisition in the third quarter.

eASIC makes structured ASICs, which is an intermediary technology between the field programmable gate arrays (FPGAs) and ASICs. The structured ASIC provides better performance and power efficiency with faster design time and lower costs.

In a post from Intel’s McNamara, he said that demand for FPGAs is growing because they are versatile and can be programmed at any time, even after equipment has been shipped to customers. FPGAs are ideal for cloud and IoT applications, but they will be critical for 5G networks.

During a Bank of America Merrill Lynch tech conference with investors held in June, McNamara told investors that because of the complex processing that is needed in 5G basebands and base stations, FPGAs will play a key role in 5G networks. “5G is really a big opportunity for FPGAs,” he said, according to a Seeking Alpha transcript.

He also hinted about a trial that Intel is currently conducting with China Telecom in which China Telecom is using FPGAs to help the operator with traffic shaping, quality of service, and packet processing. “What we’re seeing is growth from the transformation of the wired network,” McNamara said.

In the first quarter, Intel reported that sales of FPGAs were up 17 percent year-over-year and up 150 percent in the data center environment.

Structured ASICs are key to the growth of FPGAs because customers often begin deployments with FPGAs so they can quickly get to market. Then they migrate to structured ASICs because of their power efficiency and performance.

McNamara said that adding a structured ASIC technology to the company’s portfolio will help it provide customers with a low-cost, automated way to convert from FPGAs (even those from competitors) to structured ASICs.

And longer term, he said that he believes the company will be able to architect a new type of programmable chip that combines Intel’s FPGAs with eASIC’s structured ASIC in one package.

Intel’s inroads in the FPGA arena came from its $16.7 billion acquisition of Altera in 2015. Altera made FPGAs for data centers as well as cellular base stations. McNamara previously was vice president and general manager of Altera’s Embedded Division.

Dan McNamara (left), corporate vice president and GM of Intel's Programmable Solutions Group, stands with eASIC CEO Ronnie Vasishta.