Intel To Sell 51% Of Altera To Silver Lake In $8.75 Billion Deal As Turnaround Accelerates

Intel has reached a definitive agreement to sell a 51% stake in its programmable chip unit, Altera, to Silver Lake Management for $8.75 billion, marking the latest step in its ongoing turnaround strategy. The transaction aims to reduce Intel’s expenses and improve its balance sheet as the struggling chipmaker refocuses on core operations and capital efficiency. The deal also positions Intel to shift more aggressively toward ramping up its foundries in a potential joint venture with Taiwan Semiconductor Manufacturing. 

“The transaction, which values Altera at $8.75 billion, establishes Altera’s operational independence and makes it the largest pure-play FPGA (field programmable gate array) semiconductor solutions company,” Intel wrote in a press release. 

“Altera offers a proven and highly scalable architecture and tool chain and is focused on driving growth and FPGA innovation to meet the demands and opportunities of an AI-driven market,” Intel said, adding, “Intel will own the remaining 49% of the Altera business, enabling it to participate in Altera’s future success while focusing on its core business.” 

Here’s a timeline of headline developments featuring Altera:

• Sept. 2024: Worst Finally Over? Intel To Move Forward With Assessing Strategic Transactions This Month

• Dec. 2024: Intel Shortlists Suitors For Chip Division Altera Amid Turnaround Efforts

Intel announced that Raghib Hussain, former president of Products and Technologies at Marvell, will succeed Sandra Rivera as CEO of Altera on May 5. 

“Today’s announcement reflects our commitment to sharpening our focus, lowering our expense structure and strengthening our balance sheet,” Intel CEO Lip-Bu Tan stated, adding, “Altera continues to make progress repositioning its product portfolio to participate in the fastest growing and most profitable segments of the FPGA market.” 

Hussain said, ”I am excited to lead Altera in its next chapter, and this milestone with Silver Lake furthers Altera’s journey to be the world’s No. 1 FPGA solutions provider” and “backed by Silver Lake’s strong track record and now with clarity of focus as an independent company, Altera is well-positioned to build on its momentum and deliver breakthrough FPGA-based solutions that are shaping the future of compute driven by AI.” 

Intel’s turnaround plan also includes a potential joint venture with TSMC to operate the company’s chipmaking factories. Under the proposed deal, TSMC would take a 20% stake in the JV and offer manufacturing expertise and personnel training. 

In markets, Intel shares are up 4% in premarket trading. On the year, shares are flat and hovering around the $20 handle – a level that dates back to near GFC lows. 

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