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Silver Lake buys a majority stake in Intel’s Altera Unit as chipmakers cut their non-core assets and invest a lot of finances to invest billions of dollars in modern chip manufacturing plants in the US and Europe We are discussing to do so.
Last year, Intel found a private equity group willing to hire an advisor to build a substantial stake in Altera, a business that it acquired in 2015 for around $17 billion. Intel said stock sales will increase the value of Altera and set the stage for a complete exit.
While Altera has attracted interest from rival chipmakers, US private equity group Silver Lake has emerged as an option for Intel’s preferences, said three people familiar with the issue.
The company, which manages more than $100 million in assets, is known on Wall Street for its ability to revive large-scale technology businesses such as Dell. He also invested heavily in the semiconductor industry and set up Hock Tan as CEO of Avago, the current replacement of Broadcom.
The talk is still in preliminary stages, but the Silver Lake deal will inject billions of dollars into Intel’s financial resources.
The potential deal first reported by Bloomberg comes as President Donald Trump is looking for a way to revive the chipmaker’s fortunes.
People who spoke with the Financial Times said his administration is leaning towards an industry leader, Taiwanese semiconductor manufacturer, and is exploring a partnership with Intel. Such a partnership sends shockwaves through the industry, which is exposed to geopolitical tensions with China over chip supply.
Over the weekend, the Wall Street Journal reported that Broadcom was exploring a deal with Intel. Rumors that there could be a buyout of some or all of Intel’s business, including both designing and manufacturing chips, have taken the company for several months. In September, US chip designer Qualcomm also approached Intel about the deal.
Intel’s shares concluded about 16% on Tuesday with estimates of a broader dissolution of the company with TSMC.
Intel and Silver Lake declined to comment.
Intel launched a major cost-cutting effort last summer, cutting thousands of jobs and halting European manufacturing projects as its chip “foundry” business was run with billions of dollars in losses.
After interim CO-CEO and Chief Financial Officer David Zinsner vowed to pursue efficiency and rebuild the business, the company announced a spin-off of venture capital arm Intel Capital.
Intel’s retirement fortune, which led to board chief executive Pat Gelsinger in December, has augmented national security concerns as it is the only US company capable of producing cutting-edge chips.
