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Intel agrees to sell controlling stake in Altera chip business

Intel has agreed to sell a 51% stake in its Altera semiconductor business to private equity firm Silver Lake for $8.75 billion. This move aims to enhance Intel's focus and strengthen its financial position. Altera, which specializes in field-programmable gate arrays (FPGAs), will operate independently under CEO Raghib Hussain while Intel retains a 49% stake.

Key points

  • Intel sells 51% of Altera to Silver Lake for $8.75 billion, valuing Altera at this amount.
  • The deal makes Altera operationally independent but Intel retains 49% ownership.
  • Raghib Hussain will succeed Sandra Rivera as CEO on May 5.
  • Intel's CEO claims the sale supports a focus on core operations, financial health, and reducing costs.
  • Altera, founded in 1983, produces FPGAs and their supporting software, crucial in sectors like AI.
  • Intel previously acquired Altera in 2015 for $16.7 billion, forming the Programmable Solutions Group (PSG).
  • Intel plans an IPO for PSG in the next three years, spurred by a projected FPGA market growth to $25.8 billion by 2029.
  • In FY 2024, Altera generated $1.54 billion in revenue.
  • The deal is expected to finalize in the latter half of 2025.

Why it matters

  • The sale reflects ongoing trends in the semiconductor industry, emphasizing operational efficiency and specialization.
  • Intel's strategy to refocus aligns with broader trends in IT where companies are spinning off non-core assets to enhance growth.
  • The growth projection for the FPGA market signifies strong demand in high-tech sectors, aligning with advancements in AI and robotics.

Intel's strategic decision to sell a majority stake in Altera, while retaining ownership, indicates a shift towards focusing on core competencies amidst a booming FPGA market, potentially setting the stage for future growth and innovation within the technology sector.