Intel Corporation has signed an agreement to sell a 51% stake in Altera Corp to Silver Lake, a renowned technology investment firm. This deal values Altera at $8.75 billion and enables the company to operate independently, positioning it as the largest company dedicated solely to field programmable gate array (FPGA) semiconductor solutions.
Key Transaction Details
Under the terms of the agreement, Intel will retain a 49% ownership interest in Altera, allowing it to benefit from the company’s future successes while it concentrates on its core business activities. The transaction is anticipated to close in the second half of 2025, pending standard regulatory approvals.
Leadership Changes
Effective May 5, 2025, Raghib Hussain will take over as CEO of Altera, succeeding Sandra Rivera. Hussain is recognized for his extensive experience in the technology sector, having previously served as president of products and technologies at Marvell, and held leadership roles at Cavium, Cisco, and Cadence.
Financial Overview
In fiscal year 2024, Altera reported revenues of $1.54 billion, with a GAAP gross margin of $361 million and an operating loss of $615 million. The company’s non-GAAP gross margin for the same period stood at $769 million, alongside a non-GAAP operating income of $35 million. These figures illustrate Altera’s potential for growth within the rapidly evolving semiconductor sector.
Future Aspirations
Intel aims to enhance its operational focus and strengthen its financial position through this strategic investment. CEO Lip-Bu Tan expressed optimism about Altera’s trajectory, emphasizing the need for innovation in the booming FPGA market, particularly regarding AI-driven applications. Kenneth Hao from Silver Lake reiterated the investment’s potential, focusing on strengthening Altera’s position in edge computing and robotics.
Historical Context and Significance
Altera has a legacy of over four decades in advancing FPGA technologies, serving various sectors including industrial, communications, data centers, military, and emerging markets such as AI and robotics. Its commitment to innovation has established its reputation for delivering reliable and flexible semiconductor solutions that foster technological advancement for clients.
Closing Financial Impact
Following the transaction, Intel plans to deconsolidate Altera’s financial outcomes from its own reports. This shift will further streamline Intel’s financial structure while allowing Altera the independence needed to expand and innovate without the constraints of a larger corporate framework.
As both companies prepare for the transition, the future of Altera looks promising, with robust leadership and a clear focus on becoming a leader in FPGA solutions globally.