Intel has announced its decision to sell a 51 percent stake in its Altera programmable chip business to private equity firm Silver Lake for $4.46 billion. This deal, revealed on April 14, values Altera at $8.75 billion and represents a significant shift in Intel's portfolio under new CEO Lip-Bu Tan.
Intel will retain a 49 percent stake in Altera and continue to support its go-to-market strategies. The transaction is expected to finalize in the second half of 2025, at which point Altera's financials will be excluded from Intel's reports. This change is anticipated to enhance Intel's operating margins and simplify its financial reporting.
Intel originally acquired Altera in 2015 for $16.7 billion to diversify its offerings beyond traditional CPUs, focusing on programmable logic devices. At that time, field-programmable gate arrays (FPGAs) were becoming increasingly important in sectors like telecommunications, automotive, and defense. However, in recent years, Altera's alignment with Intel's strategic goals diminished, leading to reduced revenue contributions and compressed margins due to market volatility.
Silver Lake's acquisition underscores the growing interest of private equity in established technology assets. The firm, known for its investments in companies like Dell Technologies and Motorola Solutions, plans to leverage Altera's strengths in data center and edge computing. Operating independently from Intel, Altera is expected to focus on customer-specific developments and sectors where flexible chip design can provide a competitive advantage.
A leadership transition is also underway, with Raghib Hussain, formerly of Marvell Technology, set to become Altera's CEO on May 5. He will succeed Sandra Rivera, who will return to a senior role at Intel. Hussain's expertise in networking and integrated systems positions him well to lead Altera into its next growth phase.
This transaction is part of Intel's broader strategy to streamline operations and enhance profitability. Under Lip-Bu Tan's leadership, the company is prioritizing manufacturing innovation, core chip development, and financial stability. By selling a controlling interest in Altera, Intel aims to reduce operational complexity while generating immediate cash flow.
The deal is pending regulatory approval and is expected to close in the latter half of 2025. Following the transaction, Intel anticipates improved profit margins and a more focused business profile. Silver Lake will guide Altera toward growth opportunities in areas such as AI hardware, 5G systems, and industrial applications.
