Intel Corporation, under the leadership of CEO Pat Gelsinger, is considering selling a minority stake in its Altera unit to raise much-needed cash for the struggling chipmaker, according to sources familiar with the matter. The company is aiming to secure a deal that would value Altera at around $17 billion, just slightly above the $16.7 billion price tag Intel paid to acquire the business back in 2015.
Facing a significant decline in its stock price and loss of market share, Intel has been exploring various options to turn its fortunes around. This includes reaching out to private equity firms and other potential investors to gauge interest in acquiring a stake in Altera. While Intel initially viewed Altera as a key part of its future, recent developments have prompted a shift in strategy towards seeking outside investment.
While Intel had previously hinted at the possibility of taking Altera public in the coming years, the current talks of selling a stake to strategic or private equity investors represent a more immediate and potentially beneficial move for the company. CEO Pat Gelsinger and his team are keenly aware of Intel’s challenges and are actively working to address them. By offloading a portion of Altera, Intel could bolster its semiconductor fabrication efforts and reassure stakeholders of its long-term viability.
However, the sale process comes at a time when rival chipmaker Qualcomm has shown interest in acquiring Intel, a move that would undoubtedly face intense regulatory scrutiny and reshape the semiconductor landscape. Despite the hurdles, Intel is determined to chart a course towards sustainable growth and competitiveness in the industry.
It’s worth noting that Intel’s shares have taken a hit this year, dropping by 50% amid increased competition from companies like Nvidia and Advanced Micro Devices. The company’s struggles in AI chips and the data center market have underscored the urgency of implementing strategic changes to secure its position in the market.
As the situation continues to evolve, it remains to be seen how Intel will navigate the complexities of selling a stake in Altera and potentially fending off acquisition attempts from competitors. The outcome of these developments will have far-reaching implications for the semiconductor sector and the future of Intel as a key player in the industry. Stay tuned for further updates on this unfolding story.
