Intel Sells Majority Stake in Altera to Refocus and Rebuild
So here’s something big that just dropped—Intel is officially selling a 51% stake in its Altera programmable chip division to private equity firm Silver Lake, pulling in a hefty $4.46 billion. This move isn’t just about shedding an asset; it’s the first major step by Intel’s new CEO, Lip-Bu Tan, who’s stepping in with a serious game plan to bring the tech giant back on track.
Now, just to give you some context—Intel originally bought Altera back in 2015 for nearly $17 billion. Fast forward to today, and the whole business is being valued at only $8.75 billion. That’s a massive drop, right? But there’s a reason behind this sale, and it’s all about survival and smart strategy. Former CEO Pat Gelsinger took some bold swings, especially around contract chip manufacturing, but those efforts strained Intel’s finances. So, Tan’s stepping in with a clear mission: streamline, sharpen focus, cut costs, and fix the balance sheet.
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This move is less about the short-term gain and more about the long-term vision. Intel's been stuck in a tough spot—losing its edge in AI to giants like Nvidia and facing heat from AMD in the CPU space. Altera, despite being in promising markets like telecom and defense, only brought in $1.54 billion in revenue last year, a small sliver of Intel's overall pie—and it came with a $615 million operating loss.
So yes, the sale might seem poorly timed—at a market low, during a down-cycle, and while Altera’s performance is struggling—but the cash infusion is critical. It gives Intel breathing room to double down on its core chip business and perhaps even look at more asset divestitures in the future. Mobileye, the self-driving tech company Intel owns, might be next on the list.
Tan has made it clear: this isn’t about holding onto past investments—it’s about setting a clear, disciplined path forward. The shift in leadership also brings fresh energy. Raghib Hussain, formerly from Marvell, will step in as CEO of Altera starting May 5, taking the reins as the business begins a new chapter under Silver Lake’s wing.
Intel’s shares actually got a nice bump—up 2.8%—after the announcement. And that says a lot. Investors seem to believe this is a step in the right direction, even if it’s a tough pill to swallow. Sometimes, hitting reset is exactly what a company needs to rebuild stronger.
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