Intel Announces Strategic Investment by Silver Lake in Altera

[btarunr]

Intel Corporation today announced that it has entered into a definitive agreement to sell 51% of its Altera business to Silver Lake, a global leader in technology investing.
The transaction, which values Altera at $8.75 billion, establishes Altera's operational independence and makes it the largest pure-play FPGA (field programmable gate array) semiconductor solutions company. Altera offers a proven and highly scalable architecture and tool chain and is focused on driving growth and FPGA innovation to meet the demands and opportunities of an AI-driven market.

Intel will own the remaining 49% of the Altera business, enabling it to participate in Altera's future success while focusing on its core business. Intel also announced that Raghib Hussain will succeed Sandra Rivera as chief executive officer of Altera, effective May 5, 2025. Hussain is a highly accomplished and visionary technology executive with strong business acumen and engineering credentials. He joins Altera from his previous role as president of Products and Technologies at Marvell. Prior to joining Marvell in 2018, Hussain served as chief operating officer of Cavium, a company he co-founded. Prior to Cavium, Hussain held engineering roles at both Cisco and Cadence and helped found VPNet, an enterprise security company.



"Today's announcement reflects our commitment to sharpening our focus, lowering our expense structure and strengthening our balance sheet," said Lip-Bu Tan, chief executive officer of Intel. "Altera continues to make progress repositioning its product portfolio to participate in the fastest growing and most profitable segments of the FPGA market. We are grateful for Sandra's strong leadership and lasting impact throughout her 25-year Intel career and wish her continued success as she begins a new chapter. Raghib is a superb executive we selected to lead the business forward based on his vast industry experience and proven track record of success. We look forward to partnering with Silver Lake upon closing of the transaction, as their industry expertise will help to accelerate Altera's efforts and unlock additional economic value for Intel."

"This investment represents a once-in-a-generation opportunity to invest in a scale leader in advanced semiconductors. Together with Raghib, we will be focused on strengthening Altera's technology leadership position and investing in emerging AI-driven markets such as edge computing and robotics," said Kenneth Hao, chairman and managing partner of Silver Lake. "We look forward to working closely with Intel as a strategic partner who will continue to provide U.S.-based foundry services and complementary engagement with customers."

"I am excited to lead Altera in its next chapter, and this milestone with Silver Lake furthers Altera's journey to be the world's No. 1 FPGA solutions provider," said Hussain. "Backed by Silver Lake's strong track record and now with clarity of focus as an independent company, Altera is well-positioned to build on its momentum and deliver breakthrough FPGA-based solutions that are shaping the future of compute driven by AI. I am grateful for the impact Sandra has made and the team she has built as we begin Altera's next phase of growth."

Altera has been at the forefront of driving FPGA innovations for more than 40 years. The company provides leading programmable solutions that are easy-to-use and deploy in a range of strategically important segments such as industrial, communications, data center and military, aerospace, and government, as well as emerging markets such as AI/edge and robotics. Its broad portfolio of programmable semiconductor solutions, software and development tools deliver the reliability and flexibility needed to accelerate customer technology innovation.

The transaction is expected to close in the second half of 2025, subject to customary closing conditions.

Upon closing, Intel expects to deconsolidate Altera's financial results from Intel's consolidated financial statements. In Fiscal Year 2024, Altera generated revenues of $1.54 billion, GAAP gross margin of $361 million and GAAP operating loss of $615 million. Altera's Fiscal Year 2024 non-GAAP gross margin was $769 million and non-GAAP operating income was $35 million. Reconciliations between the GAAP and non-GAAP measures are provided below.

Morgan Stanley & Co. LLC acted as financial advisor to Intel.

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[Tom Yum]

Wow, what a cluster. Intel bought a competitive and profitable Altera for $US16.7 billion in 2015, and in the space of ten years, mismanaged it to the point it has to sell an unprofitable and uncompetitive Altera for half its original price. True business genius.

 

[lexluthermiester]

Wow, what a cluster. Intel bought a competitive and profitable Altera for $US16.7 billion in 2015, and in the space of ten years, mismanaged it to the point it has to sell an unprofitable and uncompetitive Altera for half its original price. True business genius.

How can some read the above article and then follow up with a comment that is lacking in all context for the scope of what was stated?

 

[Tom Yum]

How can some read the above article and then follow up with a comment that is lacking in all context for the scope of what was stated?

Care to elaborate on what element of my post is wrong? Silver Lake is buying 51% of Altera from Intel for $4.46 billion, which values Altera at $8.75 billion. Intel paid $16.7 billion for Altera in 2015. Altera the company was profitable when acquired by Intel. Altera is currently unprofitable. Altera had ~39% marketshare on the FPGA market in 2017. It now has ~29%. What measure am I missing that negates the observation that Intel has terribly mismanaged Altera over the past decade and directly led to its decline?

 

[lexluthermiester]

Care to elaborate on what element of my post is wrong? Silver Lake is buying 51% of Altera from Intel for $4.46 billion, which values Altera at $8.75 billion. Intel paid $16.7 billion for Altera in 2015. Altera the company was profitable when acquired by Intel. Altera is currently unprofitable. Altera had ~39% marketshare on the FPGA market in 2017. It now has ~29%. What measure am I missing that negates the observation that Intel has terribly mismanaged Altera over the past decade and directly led to its decline?

All of it, very much like the nonsense you just typed out.

 

[R-T-B]

All of it, very much like the nonsense you just typed out.

I don't mean to be rude and you know I don't lack respect for your opinion, but what he typed out is basically what I am seeing reported all over. What's incorrect about it?

 

[Tomorrow]

lex jumping to defend Intel again while offering zero counter arguments based on facts? Color me surprised. That's why he's on my ignore list.
Intel sure does love their lakes. Even when it's a buyer.

 

[lexluthermiester]

I don't mean to be rude and you know I don't lack respect for your opinion, but what he typed out is basically what I am seeing reported all over. What's incorrect about it?

You're not coming off as rude. The data itself is not the problem. The fact that what Mr Yum wrote is effectively an character assassination comment while missing what Intel did with that company. It's just more needless and pointless highschool level whining with a few facts thrown in to make it look credible. It isn't. Small minded nonsense like that is getting more common on TPU and needs the smack down.

lex jumping to defend Intel again while offering zero counter arguments based on facts? Color me surprised.

Is that your sad attempt at calling me a fanboy? You've been around long enough to know better.