Private equity firm Silver Lake Partners LP is reportedly in advanced negotiations to acquire a majority stake in Intel’s Altera programmable chip division. Silver Lake is said to have trounced other interested parties.
According to Bloomberg, which relies on anonymous sources, the final details of the transaction are currently being worked out, suggesting that talks are in an advanced stage. At this time, it is unclear when the deal will be officially announced. The exact size of Silver Lake’s stake in the division is not yet clear. According to sources, the negotiations could still fail. Neither Silver Lake nor Intel responded to requests for comment, Bloomberg reported.
Altera is a supplier of field-programmable gate arrays (FPGAs). These are specialized computer chips that can be programmed for specific tasks, making them more efficient than standard processors. Due to their customizable circuits, they can be optimized, for example, for artificial intelligence (AI) applications, significantly improving performance.
FPGAs are used in networking equipment, industrial systems, and other applications, in addition to AI. Customers can customize the chips via software. However, once configured, reprogramming for another task is not possible.
Silver Lake reportedly competed with other private equity firms, including Bain Capital and Francisco Partners, which were also interested in acquiring Altera. Silver Lake has extensive experience in the technology sector. It previously acquired stakes in Dell Technologies, Qualtrics International, Alibaba Group Holdings, Broadcom and NXP Semiconductors. In January, the company first disclosed that it considered Altera as a takeover candidate.
Intel bought Altera in 2015 for nearly $17 billion. The division competes primarily with AMD, which acquired FPGA manufacturer Xilinx in 2022 for $49 billion.
Intel results under pressure
It is still unclear how much money is involved in the current deal, but the sale would give Intel a much-needed financial boost. The chip giant has struggled with declining revenues for years due to increasing competition from AMD and other players in markets such as PC processors and data center chips. In addition, Intel failed to build a significant position in the market for AI chips.
In response, Intel announced plans to spin off its manufacturing operations and focus on chip design. However, the board replaced former CEO Pat Gelsinger in December before he could implement this plan. Now, the company is led by interim co-CEOs David Zinsner and Michelle Holthaus. The duo is considering several options to cut costs, including selling divisions such as Altera and investment arm Intel Capital.
Under Gelsinger, Intel initially wanted to sell a small stake in Altera and spin off the division as a separate company before an IPO. It is unclear if this is still the plan or if Silver Lake has other strategies.
More interest in Intel divisions
Earlier this week, it was revealed that competitors Broadcom and TSMC may be interested in other parts of Intel’s business. Broadcom would focus on the chip design division, while TSMC would look at Intel’s chip factories. Intel’s shares rose more than 16% with this news and now stand 29% higher this year after falling more than 60% in 2024.
Last month, Intel reported quarterly earnings that were better than Wall Street expectations. However, the outlook for the current quarter fell short due to weak demand for data center chips. The company is still searching for a permanent successor to Gelsinger.