Intel To Sell Majority Stake In Altera For $4.46 Billion To Fund Revival Effort (cnbc.com) 15
Intel will sell a 51% stake in its Altera programmable chip unit to private equity firm Silver Lake for $4.46 billion, aiming to cut costs, raise cash, and streamline the company's focus as it shifts toward becoming a contract chip manufacturer. CNBC reports: The deal, announced on Monday, values Altera at $8.75 billion, a sharp decline from the $17 billion Intel paid in 2015. [...] Since last year, Intel has taken steps to spin Altera out as a separate unit and said it planned to sell a portion of its stake. "Today's announcement reflects our commitment to sharpening our focus, lowering our expense structure and strengthening our balance sheet," [CEO Lip-Bu Tan], who took the helm after former top boss Pat Gelsinger's ouster, said.
Altera makes programmable chips that can be used for various purposes from telecom equipment to military. Reuters had first reported in November that Silver Lake was among potential suitors competing for a minority stake in Altera. The deal is expected to close in the second half of 2025, after which Intel expects to deconsolidate Altera's financial results from Intel's financial statements, the company said.
Altera makes programmable chips that can be used for various purposes from telecom equipment to military. Reuters had first reported in November that Silver Lake was among potential suitors competing for a minority stake in Altera. The deal is expected to close in the second half of 2025, after which Intel expects to deconsolidate Altera's financial results from Intel's financial statements, the company said.
Re:They should ditch X86 (Score:4, Informative)
I'm sure that there are plenty of potential customers who would use their fabs and any excess capacity they have, especially with the tariffs looming overhead, but AMD and Nvidia are competing on the bleeding edge, not with just each other, but also their existing products. Using a less capable node isn't an option for them unless it's for a low-end consumer part.
they will fab for nVidia (Score:2, Interesting)
It was already leaked that nVidia was talking with Intel regarding fab work. nVidia needs all the capacity it can get, and doesn't need bleeding edge fabs for the bottom of the product stack. nVidia could easily just sell bigger GPUs to gamers and low-end workstation users (CAD etc.) to make up for being on a less advanced node. AMD on the other hand needs the top nodes to compete with Intel on the CPU side and gets about as much fab capacity as they want from TSMC since they have much lower volumes than nV
Re: (Score:1)
private equity firm
Private Equity Firm is usually another way of saying, "Let's take a company in financial trouble, fire everybody, maximize profits until the company collapses and then close shop. [youtube.com]
Re: (Score:3)
Intel should split chip design and chip fabricati
Other Intel acquisitions to follow? (Score:3)
Intel acquired Movidius, Mobileye, and a few other big budget acquisitions in the years since they acquired Altera.
I'm wondering if this is just a one-off, or if we'll see similar deals in the weeks to come.
Re: Other Intel acquisitions to follow? (Score:2)
We will know soon enough, but my guess is that they are selling for parts, and we'll see more deals. Parts that don't get sold will just be orphaned. And even those that do might, too, depending on why the acquirer wants them - maybe just IP, or to eliminate a competitor.
Having a more focused company may not be the worst thing, but it means Intel is going to get smaller.
Re: (Score:3)
Intel acquired Movidius, Mobileye, and a few other big budget acquisitions in the years since they acquired Altera.
I'm wondering if this is just a one-off, or if we'll see similar deals in the weeks to come.
Maybe. Maybe not. Altera is a particularly good example of an acquisition that many believe should not have have happened. Little synergy with other Intel efforts and being owned by a potential competitor to your customers is not good for business. For a while good access to Intel's fab was helpful but that's not a great thing any more. I don't know if other firms Borged by Intel are as obliviously better off alone. I wonder if AMD will follow suit and spin out Xilinx.
My strategy if I was CEO (Score:3)
The Intel name needs to stay with the design firm. The separate fab needs to lose all traces of the Intel name. Call it "Innotech".
2. For both companies, get in the two Bobs in a big "what do you say you do here?" DOGE-style cleanout. Golden-parachute the old guard and move them on. Get in plenty of smart young blood. Look for some young Jensens and Lisa Su types.
3. For the fab - court all the automotive and aerospace industries, and take over the world for older process nodes that do not need cutting edge lithography, but require stable and reliable chips. Sell them on being top tier customers who no-longer have to play second-fiddle to the Intel design team. Sell them on the fact that that production is USA-made and USA-govt backed, and won't get rattled by any foreign instabilities, war in Taiwan or any other supply chain shocks. Give both price and supply guarantees.
4, For the design team (Intel) - jump fully into bed with TMSC for new designs. Don't get left behind.
3. For the fab. Now this is wild. Engage the CIA in espionage. Get info on who all the top Engineers are in Taiwan at TMSC. Pay insiders for intelligence. Bribe people. Entice the very best to come to the USA with big salaries, to work for "Innotech". It's a dirty world, get used to it. China have been doing this for decades. As long as no one is hurt, then it's fair game.
Good for Intel in the long run (Score:2)
This slump will nudge intel into producing innovative products instead of every few months introducing "Our CPUs are now 0.001% faster!" like they have done for 25 years.
Re: (Score:2)
In my experience, people who say "it's a dirty world" or "life is unfair" are the ones who make the world dirty and life unfair in the the first place, using these words as their justification.
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TSMC does not design chips, they build chips that other companies design.
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'Immediately split Intel in two, between fab and design.
The Intel name needs to stay with the design firm. The separate fab needs to lose all traces of the Intel name. Call it "Innotech".'
The problem is that internally Intel views itself first as a manufacturing firm. Designs are just something to make use of the fabs.
What happened with Altera? (Score:3)
Anyone know what happened here? Why is the value for Altera so much lower than what Intel paid for it 10 years ago. Most semiconductor companies are worth more, not less, since 2015. I know Altera was already second place to Xilinx, but how did Intel destroy so much value?