On November 5th, Reuters reported that potential acquirers, including Silver Lake Capital and Bain Capital, were preparing to compete for a minority stake in Intel’s programmable chip business, Altera.

Altera, a leading company in the FPGA field, invented the world’s first programmable logic device. Intel acquired Altera in 2015 for nearly $17 billion (approximately 120.915 billion RMB).

Before Intel’s acquisition, Altera’s chips were manufactured by TSMC. After the acquisition, Intel shifted Altera’s chip production to its own fabs.

Industry insiders say this shift coincided with Intel’s loss of manufacturing leadership and subsequent erosion by TSMC.

The acquisition was also a failure for Intel, as the transition to fabs was a time-consuming and costly process and resulted in Altera losing market share to its largest competitor, Xilinx.

Sources say Intel has taken steps to spin off Altera into an independent company, initiating the process of selling shares in the division in recent weeks. The sources added that negotiations are at an early stage, and Intel is preparing to collect preliminary bids from potential buyers in the coming weeks.

Sources also revealed that private equity firm Francisco Partners has expressed interest in acquiring Altera shares and may be a potential bidder.

Intel CEO Pat Gelsinger said, “We remain focused on selling our Altera stake with the goal of an IPO in the coming years. To this end, we have begun discussions with potential investors and expect to conclude them in early 2025.”

Intel is reportedly seeking a valuation for Altera roughly equivalent to what it paid for the 2015 acquisition. It’s unclear how much Intel’s stake in Altera will ultimately sell for, but any transaction is likely to be worth at least several billion dollars.

A successful sale of Altera would provide Intel with cash flow. Intel is currently exploring various options to reduce overall costs.

According to Intel’s third-quarter fiscal 2024 financial report, the company reported revenue of $13.284 billion and an attributable net loss of $16.639 billion.