Adam Clark

Intel said Monday that it has sold a majority stake in programmable-chip unit Altera to private-equity firm Silver Lake. The sale should free up resources to help the company bridge the gap to the next stage in its chip-manufacturing strategy.

The deal values Altera at $8.75 billion, and Intel will retain a 49% stake in the business.

The sale is expected to close in the second half of 2025, and Intel said Raghib Hussain will succeed Sandra Rivera as CEO of Altera, effective May 5. Intel acquired Altera in 2015 in an all-cash deal valued at $16.7 billion.

"Today's announcement reflects our commitment to sharpening our focus, lowering our expense structure and strengthening our balance sheet," said Intel CEO Lip-Bu Tan in a statement.

Intel shares were up 3.2% at $20.37 in early trading.

Tan was appointed as CEO as last month and is looking to prioritize its core chip design and chip-manufacturing businesses.

Intel executives said recently that the company had begun low-volume testing on its new 18A chip-manufacturing process, which it hopes will give it a technological lead against rival Taiwan Semiconductor Manufacturing.

The key questions now are the timeline and what customers Intel has lined up. The company intends to start manufacturing its own next-generation Panther Lake processors on its 18A process in the second half of this year. Nvidia and Broadcom are running tests on the process, Reuters reported previously.

"Nvidia and Broadcom remain engaged, though interest is tied more to Intel's 18AP node (a power optimized version of 18A) which timing-wise lags 18A by about a year, meaning that Intel still needs a way to bridge the next few years in terms of cash flow and resources," wrote UBS analyst Timothy Arcuri in a research note on Monday.

Arcuri kept a Neutral rating on Intel stock, and trimmed his price target to $22 from $23.

Investors will be hoping to hear more at the company's Foundry Direct Connect event on April 29, where Intel is expected to give more details on its turnaround strategy.

Write to Adam Clark at adam.clark@barrons.com

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April 14, 2025 10:02 ET (14:02 GMT)

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