Intel in advanced talks to sell Altera stake to Silver Lake at $9B valuation
The chipmaker moves closer to a deal, but final terms are still being negotiated.
Intel is in advanced negotiations to sell a majority stake in its programmable chip unit, Altera, to private equity firm Silver Lake, sources familiar with the matter told Reuters. The deal, expected to value Altera at approximately $9 billion, represents a significant moment for Intel as it seeks to restructure its operations amid mounting financial pressures.
Silver Lake is reportedly finalizing the terms of the investment, though the exact size of the stake remains uncertain, and discussions could still face delays, according to sources. Neither Intel nor Silver Lake has commented on the matter.
Intel’s decision to divest a controlling interest in Altera marks a significant shift in strategy. The semiconductor giant acquired Altera for nearly $17 billion in 2015, positioning it as a key player in the programmable chip market, which serves industries ranging from cloud computing to telecommunications and defense. However, in recent years, Intel has struggled to integrate the business effectively, and financial challenges have prompted the company to explore ways to unlock value from its assets.
The transaction is expected to provide Intel with a much-needed cash infusion at a time when it faces a critical crossroads. The company, once the undisputed leader in semiconductor manufacturing, is grappling with declining profits, intensifying competition, and investor skepticism about its long-term strategy. In an earnings call last year, then-CEO Pat Gelsinger indicated that Intel was preparing to sell a stake in Altera as part of a broader effort to streamline its business and pave the way for an eventual IPO of the unit.
Silver Lake’s potential acquisition underscores the growing interest from private equity in semiconductor assets. The firm, known for its technology-focused investments, would gain a controlling position in Altera at a valuation significantly lower than what Intel originally paid for the business. Other investment firms, including Bain Capital and Francisco Partners, had also expressed interest in acquiring a stake.
The deal comes at a time of broader upheaval for Intel. The Wall Street Journal recently reported that industry rivals Broadcom and Taiwan Semiconductor Manufacturing Co. (TSMC) are exploring potential deals that could break up Intel’s business into separate entities. Such a move would dismantle Intel’s decades-old vertically integrated model, which has long combined chip design and manufacturing under one roof.
Meanwhile, Intel’s stock has seen a dramatic rally in recent days, surging 38% over the past week amid speculation about restructuring efforts, geopolitical factors, and potential government support. Yet, the company’s long-term outlook remains uncertain as it navigates leadership changes and a challenging competitive landscape.
If finalized, Silver Lake’s investment in Altera would mark one of the most significant private equity transactions in the semiconductor space, highlighting the sector’s growing appeal to financial investors. For Intel, it would be a crucial step in its ongoing effort to stabilize its business and refocus on its core strengths in an industry undergoing rapid transformation.
Reuters contributed to this report
