Intel offloads majority stake in Altera for $4.46 billion

In a significant corporate move, Intel, the American semiconductor company, sold a 51% stake in its programmable chip division, Altera, to Silver Lake, a private equity firm, for approximately $4.46 billion. This sale follows Intel's acquisition of Altera in 2015, during which the tech giant paid $16.7 billion for the company. Since the acquisition, however, Altera's valuation has plummeted nearly 50%, further compounding Intel's financial challenges, as the company's overall losses for the previous fiscal year reached $18.7 billion. This strategic divestiture is aimed at refocusing Intel's business direction, reducing overall expenses, and enhancing its financial health. Raghib Hussain has been appointed as the new CEO of Altera, succeeding Sandra Rivera, who previously held the position and had a celebrated 25-year tenure at Intel. Hussain joins Altera from Marvell, where he served as president of products and technology. This leadership change is expected to bring new vision and direction to Altera as it seeks to innovate and adapt to the rapidly evolving field-programmable gate array (FPGA) market. Furthermore, Intel retains a crucial 49% stake in Altera, providing it with continued influence over the company's operations. The divestment aligns with Intel’s broader strategy to sharpen its focus on its core business units and seek avenues for cost reduction amidst ongoing pressures for profitability. Intel's global venture capital arm, Intel Capital, had earlier separated from its parent company in an effort to attract additional external investment. These developments signal Intel's commitment to recovering from financial losses and realigning its strategic priorities, especially after suffering substantial losses in recent quarters. Military, automotive, data center, and telecommunications markets prominently utilize Altera's FPGA technologies, and therefore, the ongoing investment from Silver Lake aims to enhance Altera’s market competitiveness in these sectors. Lip-Bu Tan, Intel's newly appointed CEO, communicated confidence in this strategic investment, asserting that it would fortify Intel’s balance sheet and further sharpen their operational focus. As this new chapter unfolds for both Intel and Altera, industry experts are keen to observe how these changes might influence market dynamics and technological advancements within the FPGA industry.