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Intel Divests Majority Stake in Chipmaker Altera to Silver Lake
Semiconductor giant Intel has reached an agreement to sell a 51% controlling interest in Altera, a specialized chipmaker known for its programmable logic devices and field-programmable gate arrays (FPGAs), to the investment firm Silver Lake. Prior to its acquisition by Intel, Altera and Intel collaborated on numerous projects, frequently leveraging each other’s technological advancements. Intel ultimately acquired Altera in 2015 for $16.7 billion. Since the acquisition, Altera has operated as a division within Intel, focusing on developing bespoke semiconductor solutions and FPGAs.
Deal Values Altera Significantly Lower Than Prior Acquisition
This new agreement values Altera at $8.75 billion. While this valuation is considerably less than the 2015 acquisition price, the deal still represents a substantial investment. Intel will retain a 49% minority stake, ensuring continued involvement in Altera’s future direction and product development.
Intel Cites Focus on Core Business as Reason for Divestment
According to an official statement, Intel attributed the sale to a strategic decision to concentrate on its core business operations. This move suggests a potential shift in Intel’s priorities and resource allocation within the competitive semiconductor landscape.
Silver Lake’s Expanding Tech Portfolio
The financial details of the transaction are still emerging, but this is anticipated to be among Silver Lake’s largest investments in recent years. Silver Lake has a substantial history of investing in the technology sector, with recent investments spanning software companies, technology firms, and even sports-related ventures. Past notable investments by the firm include significant capital infusions into Twitter and AirBnB, each receiving $1 billion in 2020.
Coincidental Naming Similarity Between Firms
The similar-sounding names of Silver Lake and Intel’s chip naming conventions appear to be purely coincidental. Despite the superficial resemblance, there is no indication of a direct corporate relationship between the two entities.
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Silver Lake’s Substantial Investment Capacity
Despite its name suggesting “silver,” the investment firm commands substantial financial resources, managing over $104 billion in investments and overseeing a portfolio of companies with a combined annual revenue exceeding $252 billion. This financial scale underscores Silver Lake’s capacity for significant investments within the technology market.
Leadership Transition Precedes Stake Sale
The sale announcement follows Intel’s recent appointment of Raghib Hussain, formerly President of Products and Technologies at Marvell, as the new Chief Executive Officer of Altera, succeeding Sandra Rivera. This shift in ownership structure will establish Altera as the largest nominally independent company in the programmable logic domain. However, the extent of Altera’s operational independence and Intel’s ongoing influence through its minority stake will become clearer over time.