Intel Offloads Altera Stake at Loss to Refocus Core | Image Source: www.ft.com
SANTA CLARA, California, April 14, 2025 – Intel Corporation announced the sale of 51% of its programmable chip division, Altera, to the private company Silver Lake for $4.46 billion. Value of Altera transactions at $8.750 billion, less than half of Intel’s $16.7 billion paid in 2015, which marks both a sober revaluation of the value of assets and a strategic realignment under the new CEO Lip-Bu Tan. This is Tan’s first major move since the reins were taken after Pat Gelsinger’s overthrow, and reflects a broader evolution of the company towards wasting non-core assets, rationalizing operations and strengthening Intel’s precarious balance.
As Intel indicated, the agreement is expected to be concluded in the second half of 2025, with the company retaining a 49% stake in Altera. The sale will inject approximately $3.4 billion in cash into Intel’s safes, according to family inmates. Once completed, Intel plans to dissociate Altera’s finances from its books, a symbolic and operational step away from a division that has never fully fulfilled its promise within the Intel ecosystem. Although the transaction may seem to reflect reduced performance, it reveals more about Intel’s changing priorities and the big bets involved in redefining its place in a semiconductor market that is rapidly evolving dominated by AI, custom silicon and edge computing.
Why is Intel now selling a picture of the majority in Altera?
To understand the logic behind Intel’s immersion, we must consider the double pressures the company faces: eroding its market share and increasing its capital costs. According to Bloomberg and Reuters, Intel fought to get its foot back in the IA race, where rivals like Nvidia and AMD advanced with specialized chips. Meanwhile, the company’s aggressive investments in the manufacturing of contract chips – which are associated with TSMC – have tightened its balance sheet. Tan’s strategy seems to focus on reducing these burdens by downloading undervalued or unvalued units such as Altera.
“Today’s announcement reflects our commitment to refine our approach, reduce our spending structure and strengthen our balance,” said Lip-Bu Tan in an official statement. The subtext is clear: Intel leans in the hope of moving faster. Altera, which recorded only $1.54 billion in revenues in 2024 - 3% of Intel’s total – and an operating loss of $615 million, is simply not part of the central growth strategy. Despite its potential in the markets of microcommunicators, military and programmable, its financial performance made it an easy candidate for a strategic exit.
What will the silver lake do with Altera?
Silver Lake’s participation adds another dimension to history. Known to support semiconductor transformation agreements, particularly with Broadcom, Silver Lake sees an opportunity in Altera. Kenneth Hao, President and Managing Partner of Silver Lake, said that investment represents ”once in a generation an opportunity to invest in a scale leader in advanced semiconductors.” Under its majority ownership, Altera will turn to emerging AI-driven markets such as robotics, smart infrastructure and advanced computing.
To carry out this transformation, Altera will be heated by Raghib Hussain, who was previously president of products and technologies at Marvell Technology. Hussain replaces Sandra Rivera and should focus again on custom design of AI chips. Her appointment is consistent with Silver Lake’s intention to revitalize Altera’s position in a market that increasingly rewards agility and specialization. The company’s history with Broadcom offers a model: the focus on integration, efficiency and targeted innovation.
What led to Altera’s decline under Intel?
Altera’s journey under Intel is a case study in strategic misfit. Acquired in 2015 in the midst of a wave of enthusiasm for programmable logic chips, Altera wanted to complete Intel’s impulse beyond x86 processors. However, as Reuters and The Financial Times pointed out, the transition to the internal manufacturing of TSMC chips in Taiwan proved costly and disruptive. Not only did he impact the delivery cycles, but he also opened the door to rivals like Xilinx (later acquired by AMD) to gain ground.
According to Gabelli Funds’ portfolio manager Hendi Susanto, “Altera’s immersion is in a low-market cycle and at the bottom of Altera’s business performance. This is not the best time to sell Altera’s bet.”
This sentiment reflects a broader investor concern: that Intel may be selling a valuable asset at a discount due to short-term financial pressures. Still, the long-term inefficiencies of integrating Altera into Intel’s broader architecture made a clean break both inevitable and necessary.
How does this fit into Intel’s biggest reconstruction?
The Altera Accord is not an isolated event but a chapter in Intel’s broader playbook under Tan’s direction. The company would be exploring further divestitures of assets, including the partial sale of its majority bin in Mobileye Global, a stand-alone technology company. CFO David Zinsner pointed out at the end of last year that Intel was considering selling its Mobileye position to “use money”. Such movements indicate that there is an increasing urgency to focus on Intel’s central processing and smelting companies, which remain under pressure from AMD and Nvidia.
Bob O’Donnell, chief analyst at Technalyse Research, said he hoped to see further differences coming. Intel is essentially triage: to determine which parts of the company are essential for future competitiveness and that are distractions. Altera’s sale is the first house, but it won’t be the last. In this way, Tan’s approach contrasts strongly with his predecessor’s expansive vision, choosing a more disciplined strategy, back to the base.
What are the reactions and implications of the market?
The market response to the announcement was moderately positive. Intel’s shares rose to 6.6% at the beginning of trade, reflecting the pragmatic approval of the pivotal investor. For Wall Street, the message is clear: Intel is serious about remodeling to survive in a post-PC world, dominated by AI. According to Yahoo Finance, although the loss of valuation is pronounced, strategic clarity is welcome.
However, risks remain. Intel is still behind the IA accelerators, and his casting company is an expensive bet that he hasn’t paid yet. The investment of non-essential assets such as Altera provides liquidity but does not solve the most complex problem of recovering technical leadership and market. Enforcement will be essential, and investors will closely monitor whether Intel can turn its simplified portfolio into real profits.
What future do Intel and Altera have?
For Intel, the future depends on discipline. The company must now demonstrate that it can innovate in its core competencies while managing a more inclined and focused operation. It is a strategy that recalls other technological changes: Apply in the late 1990s or Microsoft post-Ballmer, but bets are particularly high given the intensive nature of chip capital.
For Altera, the road seems more open. Under Silver Lake and Hussain, the company has the flexibility to reimagin itself without being linked to Intel’s slower legacy systems. The focus on AI, edge computing and specific vertical solutions could make Altera a force that can be taken into account in a few years. But as always, the semiconductor industry rewards speed and execution against promises.
In the end, the sale of Altera’s majority stake is less a retirement and more a strategic consolidation. It’s about when to turn, even a loss, to fight another day. In this sense, Intel’s decision can be a painful but necessary step towards relevance in a fiercely competitive and innovative world.
