Private equity firm Silver Lake Management is in exclusive negotiations to acquire a majority stake in Intel’s programmable chip division, Altera, reported various media citing sources familiar with the discussions. The deal is expected to value Altera at approximately $9bn, though the exact size of the stake has yet to be finalised.
Intel, which acquired Altera for nearly $17bn in 2015, announced in 2023 that it would seek to sell a stake in the unit as part of a broader restructuring strategy. The company has been exploring ways to cut costs and generate capital by divesting businesses that no longer align with its core focus. In an October earnings call, then-CEO Pat Gelsinger stated that Intel aimed to sell a stake in Altera with plans for an initial public offering in the coming years. Discussions with potential investors are expected to conclude by early 2025.
Competing interest from private equity firms
Interest in Altera has come from multiple firms. In November, reports indicated that private equity firms Bain Capital and Francisco Partners were among those considering a bid. At the time, some potential buyers valued the business at as little as $9bn, significantly lower than Intel’s original acquisition price.
Beyond the Altera deal, Intel has attracted interest from other companies evaluating acquisitions of parts of its business. The Wall Street Journal reported last week that Taiwan Semiconductor Manufacturing (TSMC) has examined acquiring some or all of Intel’s semiconductor fabrication plants. The company is considering various options, including forming a consortium with investors. Meanwhile, Broadcom has been reviewing a potential bid for Intel’s chip design and marketing business, though any move would require securing a partner to take over Intel’s manufacturing operations.
Once dominant in the semiconductor industry, Intel has lost market share in recent years, particularly as competitors have advanced in AI accelerators and other emerging technologies. The company has struggled to keep pace with rivals such as TSMC and Broadcom. In late 2023, Intel’s board removed CEO Pat Gelsinger, citing slow progress in his efforts to turn the company around. During his tenure, Gelsinger focused on expanding Intel’s manufacturing operations, but the company struggled to secure major contracts and advance its AI capabilities as expected. The search for a new chief executive is ongoing.
Intel’s latest quarterly earnings for the fourth quarter (Q4) of 2024, reported in January, exceeded analysts’ expectations, but its revenue forecast for the current quarter (Q1 2025) fell short of estimates. The company continues to face challenges in the data centre sector while navigating ongoing restructuring efforts and leadership changes. Intel reported Q4 revenue of $14.3bn, a 7% decline year-over-year, though it exceeded analysts’ expectations of $13.81bn. The company posted a net loss of $126m compared to a net income of $2.67bn in the same quarter the previous year. The company forecasts revenue between $11.7bn and $12.7bn, below the consensus estimate of $12.87bn.
Read more: Intel faces potential breakup as TSMC and Broadcom weigh separate deals
