Silver Lake Management is in exclusive talks to buy a majority stake in Intel Corp.'s programmable chip unit, according to people familiar with the matter.

The private equity firm is working on details of an investment in Altera, whose multi-purpose chips are deployed primarily in telecommunications networks, according to people familiar with the matter.

The size of the stake has not been determined, although the talks are at an advanced stage, the people said. They said the talks could still be delayed or fall through and asked not to be identified discussing confidential information.

Spokesmen for Intel and Silver Lake declined to comment.

Intel shares rose 17% on Tuesday, their biggest intraday gain in nearly five years. Earlier in the day, rumors that Intel could be broken up in a deal with Taiwan Semiconductor Manufacturing Co. boosted the company's shares. At 3:37 p.m. in New York, Intel shares were up about 15%, giving the company a market value of about $117 billion.

Santa Clara, California-based Intel agreed to buy Altera in 2015 for about $17 billion.

Intel said last year it would consider selling some of its stake in Altera as part of a broader plan by the chipmaker to turn around its business. Bloomberg News reported in November that Lattice Semiconductor Corp. and some acquisition companies were interested in Altera. People familiar with the matter previously said that some acquirers valued Altera at only $9 billion.

Intel once dominated the chip industry, but has lost market share to competitors in recent years and missed the opportunity to shift to artificial intelligence accelerators. Last year, Intel's board of directors ousted CEO Pat Gelsinger because his comeback plan was slow to progress, and the company has been looking for a new leader.

Altera announces separation from Intel

Altera finally became an independent company in January, nearly a year after Intel announced the launch of its independent FPGA (field programmable gate array) business.

While the company is still owned by Intel and will maintain a strategic partnership with the chipmaker, the newly independent Altera will have more flexibility to work with other foundries in the future.

Altera posted on Twitter X: "Today (January 7) marks a proud milestone as we officially raise the Altera flag as an independent FPGA company! We are excited to drive the future of innovation with agility and focus, shaping the next era of #FPGA technology..."

Originally a chip manufacturing company, Altera was acquired by Intel for $16.7 billion in 2015 and incorporated into the data center division under the Intel Programmable Solutions Group (PSG) brand.

Intel first announced in February 2024 that it would spin off the company. The independent Altera will sell reconfigurable chips for systems in the data center, cloud, industrial and automotive markets. It will be managed by Sandra Rivera, the former head of Intel's Data Center and Artificial Intelligence (DCAI) organization.

When the spinoff was first announced, Rivera said Altera's addressable market would be $55 billion in the next few years.

FPGA chips are made up of logic blocks that customers can configure in the field to accelerate specific workloads. These programmable chips can be paired with microprocessors to make hardware faster and more amenable to a software-defined approach.

While Altera seems optimistic about a new start, just like its troubled parent Intel, it has its own financial woes to overcome. In the third quarter of 2024, Altera's revenue fell 44% year-over-year to $412 million.

Previous news: Intel seeks to acquire minority stake in Altera business for billions of dollars

Intel is considering selling at least a minority stake in its Altera subsidiary, a deal that would raise billions of dollars in cash for the struggling chipmaker, according to reports in October.

Intel is seeking a deal worth about $17 billion, according to people familiar with the matter who asked not to be identified discussing confidential information publicly. Intel acquired Altera in 2015 for $16.7 billion.

Intel has been seeking major changes after a sharp drop in its stock price and a long-term decline in market share. The company this week extended offers to a number of private equity and strategic investors to acquire Altera, sources said. Intel has indicated to some investors that it may acquire a majority stake in the company.

At the time, an Intel representative declined to comment. The sale process represents a sharp departure from Intel's previous assessment of Altera. Intel has previously said it could monetize the Altera business through an IPO as early as 2026. But the idea of taking a strategic or private equity investment would significantly accelerate those plans.

Gelsinger and his leadership team have previously said Intel understands its disadvantage and is actively working to address it. Selling the Altera stake could allow Intel to more easily pursue its semiconductor manufacturing ambitions and reassure investors that Intel's future as an independent company is bright.

Reference link https://www.bloomberg.com/news/articles/2025-02-18/silver-lake-is-near-deal-for-stake-in-intel-s-altera-unit

Source: Content compiled from Bloomberg

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