Key takeaways:
- Intel has agreed to sell a 51% stake in its programmable chip unit Altera to private equity firm Silver Lake for $4.46 billion.
- The deal values Altera at $8.75 billion and establishes its operational independence as the largest pure-play FPGA semiconductor solutions company.
- Intel will retain a 49% stake in Altera, enabling it to participate in the unit’s future success while focusing on its core business and strengthening its financial position.
Detailed Analysis
In a strategic move aimed at sharpening its focus and bolstering its financials, chip giant Intel Corporation has announced plans to sell a controlling 51% stake in its Altera programmable chip business to leading technology investment firm Silver Lake. The deal, valued at $8.75 billion, will see Altera spun off as an independent company and the largest pure-play provider of FPGA (field programmable gate array) semiconductor solutions.
Under the terms of the agreement, Intel will retain a 49% stake in Altera, allowing it to benefit from the unit’s future growth while concentrating on its core operations. The transaction is expected to close in the second half of 2025, subject to customary closing conditions and regulatory approvals.
Altera, which Intel acquired in 2015 for $16.7 billion, has been at the forefront of driving FPGA innovations for over four decades. The company’s broad portfolio of programmable semiconductor solutions, software, and development tools cater to strategically important segments such as industrial, communications, data center, military, aerospace, and government, as well as emerging markets like AI, edge computing, and robotics.
“This investment represents a once-in-a-generation opportunity to invest in a scale leader in advanced semiconductors,” said Kenneth Hao, chairman and managing partner of Silver Lake. 1 “Together with Raghib [Hussain, Altera’s new CEO], we will be focused on strengthening Altera’s technology leadership position and investing in emerging AI-driven markets such as edge computing and robotics.”
The divestment aligns with Intel’s strategy to streamline its operations and strengthen its financial position amid a challenging market environment. In fiscal year 2024, Altera generated revenues of $1.54 billion but reported a GAAP operating loss of $615 million. 2 By offloading a majority stake in the unit, Intel aims to reduce its expense structure and redirect resources towards its core businesses.
Conclusion
Intel’s sale of a controlling stake in Altera to Silver Lake marks a significant shift in the company’s strategy as it seeks to revive its fortunes in an increasingly competitive semiconductor landscape. The move will enable Intel to sharpen its focus on its core operations while allowing Altera to operate independently and capitalize on growth opportunities in the booming AI and edge computing markets.
For investors, the deal provides Intel with a much-needed financial boost and the potential to unlock additional value from its remaining stake in Altera. However, the long-term success of this strategic realignment will hinge on Altera’s ability to maintain its technological leadership and capitalize on emerging market trends under Silver Lake’s stewardship.
References
1 Intel Announces Strategic Investment by Silver Lake in Altera. Intel.com. Retrieved [May 14, 2025].
2 Intel to sell majority stake in Altera for $4.46 billion to fund revival effort. Reuters.com. Retrieved [May 14, 2025].
3 Intel Finalizes Deal to Sell 51% Altera Stake to Silver Lake. Yahoo.com. Retrieved [May 14, 2025].
4 Intel to sell majority stake in Altera for $4.46 billion to fund revival effort. CNBC.com. Retrieved [May 14, 2025].
5 Intel Announces Strategic Investment by Silver Lake in Altera. Intel Newsroom. Retrieved [May 14, 2025].
6 Intel sells majority stake in Altera to Silver Lake investors in a deal …. The Seattle Times. Retrieved [May 14, 2025].
7 Intel to sell 51% stake in Altera to Silver Lake. Yahoo Finance. Retrieved [May 14, 2025].
8 Intel to sell controlling stake in Altera chip business to Silver Lake. TechCrunch. Retrieved [May 14, 2025].
9 Intel Sells Majority Stake in Altera to Silver Lake Investors in a Deal …. U.S. News & World Report. Retrieved [May 14, 2025].
10 Intel sells 51% stake in Altera to Silver Lake for $8.75bn. Data Center Dynamics. Retrieved [May 14, 2025].
