Intel Corp. today announced that it is selling a majority of stake (51%) in the Altera chip business to Silver Lake, a private buyout firm.
The deal that is worth $8.75 billion will raise cash to restore the chipmaker’s core business that has been in troubled waters since months now, while at the same time establishing Altera as an operationally independent FPGA semiconductor solutions company.
Silver Lake was one of the private equity firms bidding to acquire a minority stake in Altera since last year. Two years back, the chipmaker declared its intention to curve out Altera as a separate company.
Although reportedly Altera earned revenues of $1.54 billion in 2024, Intel is selling off the majority stake to get rid of the company’s non-core assets which are weighing it down.
Intel acquired Altera back in 2015 for short of $17 billion, but lately has been facing loss of market share to rivals like AMD and NVIDIA, plummeting stocks and growing financial pressures.
Intel said that it will continue to hold 49% stake, with a new Altera CEO Raghib Hussain set to take the helm.
“Altera continues to make progress repositioning its product portfolio to participate in the fastest growing and most profitable segments of the FPGA market,” said the newly appointed Lip-Bu Tan in a statement.
“This investment represents a once-in-a-generation opportunity to invest in a scale leader in advanced semiconductors,” he added.
For four decades, Altera has advanced FPGA innovations catering to critical industries like aerospace, government, military, communications and data centers.
Ken Hao, chairman of Silver Lake told the Financial Times that going forward, the Altera programmable solutions will benefit defence, healthcare and industrial companies where artificial intelligence (AI) is being rapidly adopted.
The deal will close in H2, said Intel, subject to customary closing conditions.
“The spinoff of the majority of Altera is a prudent move to raise capital and focus [Intel’s] resources,” tweeted Futurum Group CEO, Daniel Newman.
“I expect more of this under new CEO Lip-Bu Tan.”
