Intel Waves Farewell to Its Majority Stake in FPGA Giant Altera, Sells Control to Silver Lake

The promise of a "new era" for Intel from incoming chief executive officer Lip-Bu Tan came with a pledge to focus on "core business units" — and it looks like field-programmable gate arrays (FPGAs) didn't make the cut, with the company selling a majority share in its Altera subsidiary to investment group Silver Lake.

"Today’s announcement reflects our commitment to sharpening our focus, lowering our expense structure, and strengthening our balance sheet," Tan claims of the sale. "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 [Rivera]'s strong leadership and lasting impact throughout her 25-year Intel career and wish her continued success as she begins a new chapter."

"Raghib [Hussain, newly-appointed Altera chief executive officer] is a superb executive we selected to lead the business forward based on his vast industry experience and proven track record of success," Tan continues. "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."

Altera was founded in 1983, with co-founders Rodney Smith, Robert Hartmann, James Sansbury, and Paul Newhagen naming it as a play on the world "alterable" — a reference to the company's FPGA products, which unlike application-specific integrated circuits (ASICs) can have their internal logic rewired at-will post-production. The company floated on the stock exchange via initial public offering in 1988, then went private again when Intel acquired it in 2015. After nearly a decade as the Intel Programmable Solutions Group (PSG), Altera became Altera again when Intel announced it would spin it out as an independent subsidiary but maintain a majority stake — a stake it has now sold to Silver Lake.

"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 [Artificial Intelligence]-driven markets such as edge computing and robotics," says Silver Lake's chair and managing partner Kenneth Hao of the acquisition. “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."

The sale values Altera at $8.75 billion, despite the company having posted an operating loss of $614 million in its 2024 financial year, and gives Silver Lake a 51 per cent majority share of the company. It's a considerable drop from the $16.7 billion — $22.53 billion, corrected for inflation — Intel paid for the company in 2015, but comes as Intel looks to shore up its finances and head into what chief executive Tan describes as a "new era" in which the company will "correct past mistakes" with a "software first" development process. "Under my leadership, we will return [to] our roots," Tan told attendees at Intel Vision 2025, "into an engineering-first company."

The deal is expected to close before the end of the year, subject to the usual regulatory approvals.