FPGAs are in automotive, defense, wired and wireless and trying to get into data center. Intel buying Altera might change things. Will Xilinx face significant headwinds in the near future?
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The FPGA companies have been saying ASICs are too expensive and soon all electronics will be FPGA. This will never happen, ever. I have heard this same pitch from both Altera and Xilinx. The reason why it to compete against FPGA for performance, 40nm is more than adequate. The cost of 40nm is very cheap and a proven technology. Power will be a LOT better and cost will be much cheaper. FPGA only plays as standards are still in flux and for low volume applications. This will never change.
On the plus side, FPGAs have picked up a lot of sockets since ASICs have gotten too expensive. On the minus side, Altera and Xilinx have gotten so large that they are now cyclic companies. With the economy in a recession, there will most likely be some layoffs. Altera has larger market share than Xilinx but is having issues introducing new state of the art parts. Xilinx may have the opportunity to regain #1.