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Intel Seeks Billions for Minority Stake in Altera Business, Sources Say

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Intel is reportedly exploring the sale of a minority stake in its Altera business, aiming to raise several billion dollars in much-needed cash as it seeks to stabilize its financial position. According to sources familiar with the discussions, Intel is pursuing a deal that values Altera at around $17 billion, close to the $16.7 billion it paid to acquire the company in 2015.

This potential sale marks a significant strategic shift for Intel, especially since CEO Pat Gelsinger had recently stated that Altera was considered a core part of the company’s future. However, after experiencing a sharp decline in stock price and a prolonged period of losing market share, Intel has been forced to consider dramatic actions to turn things around.

The company has approached private equity firms and other strategic investors about a possible stake in Altera, with some investors being offered the opportunity to acquire a majority interest, according to the sources. Intel’s representatives have declined to comment on the reports.

Intel had previously hinted at plans to monetize the Altera unit through an initial public offering (IPO), potentially in 2026. However, these recent developments suggest that the company may accelerate those plans in order to raise capital more quickly. A sale of this magnitude could provide Intel with the resources to focus on its broader ambitions, particularly in semiconductor manufacturing, and demonstrate to investors that it can remain competitive as an independent entity.

The potential sale comes amid heightened competition within the semiconductor industry. Rival companies such as Qualcomm have reportedly expressed interest in acquiring Intel, although such a deal would likely face significant regulatory scrutiny and could reshape the landscape of the semiconductor market.

Intel has faced numerous challenges in recent years, including a 50% drop in its stock price this year alone. The company has struggled to keep pace with competitors like Nvidia, which has gained significant ground in the artificial intelligence (AI) chip market, and Advanced Micro Devices (AMD), which continues to erode Intel’s market share in both the PC and data center sectors.

As Intel seeks to reestablish its position in the industry, the potential sale of a stake in Altera could represent a pivotal move in its broader recovery strategy.

 

Intel Faces Setback as Broadcom Chip Manufacturing Tests Fall Short

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Intel’s efforts to revitalize its contract manufacturing business have suffered a blow after tests with chipmaker Broadcom yielded disappointing results, sources revealed. Broadcom had sent silicon wafers through Intel’s cutting-edge 18A manufacturing process, which was intended to demonstrate the viability of the technology. However, after receiving the wafers last month, Broadcom’s engineers concluded that the process was not yet suitable for high-volume production. This setback poses a significant challenge to Intel’s turnaround strategy led by CEO Pat Gelsinger, who launched the contract manufacturing division in 2021 as a cornerstone of the company’s recovery.

Despite the setback, Intel remains optimistic. The company asserted that the 18A process is “healthy and yielding well,” with plans for full-scale production on track for next year. Broadcom, on the other hand, stated that it is still evaluating Intel’s offerings and has yet to make a final decision on a potential partnership.

Intel has been under significant pressure to secure major contracts with customers like Nvidia and Apple, especially as it faces mounting losses in its foundry business, which posted a $7 billion operating loss in the last quarter. The company aims to break even by 2027, but setbacks like the one with Broadcom complicate its path forward.

The foundry business, a critical part of Intel’s $100 billion expansion strategy, is integral to filling capacity at its newly constructed facilities in the U.S. However, Intel’s struggles to achieve viable yields with its advanced processes could hinder its ability to attract customers and compete with established giants like Taiwan Semiconductor Manufacturing Co. (TSMC).

Broadcom’s decision to test Intel’s 18A technology came amidst the chipmaker’s growing focus on AI hardware, with significant contracts from companies such as Google and Meta. However, concerns about defects on the wafers and the quality of chips produced by Intel’s process have made Broadcom cautious about committing to the new manufacturing technology.

Intel has pledged to be manufacturing-ready by the end of this year for its own chips, with plans to begin high-volume production for external customers in 2025. However, with high stakes and complex challenges ahead, Intel’s ability to turn its foundry business around remains uncertain.

 

Intel Explores Strategic Options Amid Business Struggles, Considers Selling Units

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Intel is working with advisors, including Morgan Stanley, to present its board with a range of strategic options to address the company’s faltering performance. These options, which could involve selling off certain business units, will be discussed at an upcoming board meeting in September. The move comes as Intel faces growing investor skepticism and increasing competition from rivals like Nvidia, whose AI-driven GPU technology has gained dominance in the market. Despite CEO Pat Gelsinger’s assurances of operational efficiency and the company’s upcoming release of its Lunar Lake processors, Intel’s stock has fallen nearly 60% this year. Recent layoffs of 15,000 employees and costly expansions in the company’s foundry business have yet to alleviate investor concerns. Intel is under pressure to reverse its downward trajectory and regain its standing in the semiconductor industry.