Intel Corp has agreed to sell a 51 percent stake in its programmable chips unit Altera to Silver Lake Management LLC, making good on plans to start spinning off non-core assets.
The transaction values Altera at US$8.75 billion, according to a statement yesterday, about half what Intel paid for it a decade ago.
Intel will continue to hold a 49 percent stake in the business. The deal is expected to close in the second half of this year.
Photo: REUTERS
Altera will be run by Raghib Hussain, replacing Sandra Rivera as chief executive officer. Hussain will join from Marvell Technology Inc, where he is president of products and technologies.
“Today’s announcement reflects our commitment to sharpening our focus, lowering our expense structure and strengthening our balance sheet,” Intel CEO Lip-Bu Tan (陳立武) said.
“This investment represents a once-in-a-generation opportunity to invest in a scale leader in advanced semiconductors,” said Kenneth Hao (郝也康), chairman and managing partner of Silver Lake, who added that under new leadership Altera will be focused on investing in “emerging AI-driven markets such as edge computing and robotics.”
Shares of Intel rose as much as 4.3 percent after markets opened in New York.
Intel agreed in 2015 to pay US$16.7 billion for Altera, whose multiuse chips are primarily deployed in telecommunications networks. Last year, the US chipmaker said it would look to sell a stake in Altera — part of a broader plan to turn its business around.
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 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 better align itself with customers.
Intel needs to replace the engineering talent it has lost, improve its balance sheet and better attune manufacturing processes to meet the needs of potential customers, Tan told attendees at a company conference. He didn’t specify which parts of Intel were no longer key to its future.
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