Intel funds revival by selling stake in Altera worth $4.5B
What's the story
Intel has decided to sell a 51% stake in its programmable chip business, Altera, to private equity firm Silver Lake for $4.46 billion. The deal marks the first major move by new CEO Lip-Bu Tan as part of his plan to revive the ailing semiconductor giant. It values Altera at $8.75 billion, much lower than the $17 billion Intel paid when it acquired it in 2015.
Business transformation
Intel's strategic shift toward contract manufacturing
The sale of Altera will give a financial boost to Intel as it aggressively trims expenses and strengthens its balance sheet. The company is also investing in becoming a contract manufacturer, which requires a lot of capital. Since last year, Intel has been working on spinning off Altera into an independent unit and has expressed plans to sell part of its stake.
Financial outlook
Altera's financial performance
Altera, which manufactures programmable chips for everything from telecom equipment to military applications, generated a revenue of $1.54 billion in 2024 but posted an operating loss of $615 million. The deal with Silver Lake should close in the second half of 2025. "Today's announcement reflects our commitment to sharpening our focus, lowering our expense structure and strengthening our balance sheet," said Tan.