In the first major move by new CEO Lip-Bu Tan to revive the struggling American chipmaker, Intel has agreed to sell a 51% stake in its Altera programmable chip business to buyout firm Silver Lake for $4.46 billion.
Intel’s revival strategy
Intel’s Altera stake sale will provide the company much-needed cash after hefty bets on contract manufacturing by former CEO Pat Gelsinger strained its finances. Selling assets, including Intel's stake in Altera, is at the center of Tan's strategy to streamline the chipmaker.
It is noteworthy that Monday's deal values Altera at just $8.75 billion compared to the nearly $17 billion Intel paid in 2015. The leadership missteps have left Intel struggling to gain a footing in the AI industry, which is now dominated by Nvidia, while rival AMD threatens its stronghold of the central processor market.
"Today's announcement reflects our commitment to sharpening our focus, lowering our expense structure and strengthening our balance sheet," said Tan, who took the helm after Gelsinger's exit in December.
Right after the deal, Intel’s shares were up 2.8% in afternoon trading.
Since last year, Intel has taken steps to spin out Altera, which makes programmable chips that can be used for various purposes in industries ranging from telecom to the military.
The deal is expected to close in the second half of 2025, after which Intel expects to deconsolidate Altera's financial results from its own.
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