Intel to divest 51% stake in Altera for $4.46 billion to Silver Lake amid cost cuts, stock down 17% in one month

Intel has agreed to sell a 51 per cent stake in its Altera programmable chip business to buy firm Silver Lake for $4.46 billion, in the first major move under new CEO Lip-Bu Tan to revive the struggling American chipmaker.

The deal, announced on Monday, values Altera at $8.75 billion, a sharp decline from the $17 billion Intel paid in 2015. The sale will boost Intel as the once-leading chipmaker cuts costs after heavy investments to become a contract manufacturer under former boss Pat Gelsinger's strained finances.

Intel-Altera deal

The deal is expected to close in the second half of 2025. Raghib Hussain, who replaces Sandra Rivera as chief executive officer, will run Altera. Shares of Intel have declined 17 per cent in one month and two per cent year-to-date (YTD).

Shedding assets, including Intel's stake in Altera, is central to Tan's strategy to streamline the chipmaker. Several CEOs have failed to diversify beyond the company's mainstay PC and server chip business for years.

The leadership missteps have left Intel struggling to gain a footing in the AI industry dominated by Nvidia while rival AMD threatens its stronghold of the central processor market. Intel agreed in 2015 to pay $16.7 billion for Altera, whose multiuse chips are primarily deployed in telecommunications networks.

In 2024, the US chipmaker said it would look to sell a stake in Altera as part of a broader plan to turn its business around. Bloomberg News has reported that Altera drew interest from Lattice Semiconductor Corp. and a group of buyout firms.

Intel market share

Intel has lost market share to rivals in recent years and missed the shift to artificial intelligence accelerators, a market now dominated by Nvidia Corp. Intel’s board ousted Chief Executive Officer (CEO) Pat Gelsinger last year after his comeback plan was slow to gain momentum.

Tan, who recently stepped into the role of CEO, said about two weeks ago that the chipmaker will spin off assets that aren’t central to its mission and create new products, including custom semiconductors, to try to align itself with customers better.

Tan told attendees at a company conference that Intel needs to replace the engineering talent it has lost, improve its balance sheet, and better attune manufacturing processes to meet potential customers' needs. He did not specify which parts of Intel were no longer key to its future.