Intel is selling just over 50% of its Altera chip unit to private equity firm Silver Lake for $4.46 billion.
The deets: Altera makes programmable chips, the kind that can be customized for specific tasks like defense, telecom, AI, and cloud computing. These are the adaptable brains behind critical, high-performance tech.
The deal values Altera at $8.75 billion, about half of what Intel paid when it bought the company back in 2015. The transaction is expected to close by late 2025, and Intel will deconsolidate Altera’s financials from its books.
Why it matters: Intel’s been bleeding cash after making big bets on contract chip manufacturing, trying to play catch-up with TSMC and Samsung. With this partial sell-off, it’s trimming the fat, raising funds, and letting Altera operate more independently under Silver Lake’s guidance.
Worth noting, this is also the first major move under new CEO Lip-Bu Tan, who recently took the reins to turn around Intel’s fortunes. It signals a strategic shift - focus on what works, and cut what doesn’t.
By the numbers: Altera pulled in $1.54 billion in revenue in 2024, just 3% of Intel’s total sales but reported a $615 million operating loss. So, while Altera’s tech is niche and powerful, it’s not moving the needle for Intel’s core game.
Zoom out: Intel's main game is making CPUs for PCs and servers. Altera, while valuable, is outside that core. The company has been trying to clean house, shedding non-core businesses and simplifying operations. This aligns with CEO Gelsinger’s turnaround plan to make Intel leaner, faster, and more focused.
Instead of juggling too many businesses, Intel is streamlining to go all-in on what matters: AI, high-performance computing, and advanced manufacturing. That’s where the real money is & where Nvidia and AMD are pulling ahead fast.
