Intel sells 51% stake in Altera to private equity firm on a $8.75B valuation

Without arguing the merits of the Altera investment or divestment, a common pattern for Intel seems to be a wild see-sawing between an aggressive and a defensive market posture - it’s a regular occurrence for Intel to announce a bold new venture to try to claim some new territory, and just as regular that they announce they’re halting that venture in the name of “consolidating” and “focusing on their core.” The consequence is that they never give new ventures time to actually succeed, so they just bleed money creating things they murder in the cradle, and nobody born before last Tuesday is investing in bothering to learn the new Intel thing because its expected lifespan is shorter than the average Google product.<p>Intel either needs to focus or they need to be bold (and I’d actually prefer they be bold - they’ve started down some cool paths over time), but what they really need is to make up their goddamn minds and stop panicking every other quarter that their “ten-year bets” from last quarter haven’t paid off yet.

Rest in Peace Altera I guess? I still drink out of my color changing Altera mug (that&#x27;s long stopped changing color) most days. PE ruins everything so it&#x27;s only a matter of time before they&#x27;re gutted and sold for scraps by the vultures at Silver Lake. (though honestly the writing was on the wall since the Intel acquisition I had held onto some hope) If only we had a functioning government interested in actually maintaining our technological dominance and enforcing&#x2F;expanding antitrust legislation. I wrote my first Verilog on an Altera chip and I&#x27;ll remember them fondly.

As someone who&#x27;s worked at Xilinx before and after the merger, it&#x27;s a surprise they were even able to sell it for that much. Altera has been noncompetitive to Xilinx in performance and to Lattice in terms of low-end&#x2F;low-power offerings for at least the last 2 generations.<p>I&#x27;m concerned about the future of FPGAs and wonder who will lead the way to fix these abhorrent toolchains these FPGA companies force upon developers.

For those keeping score at home, 51% sold at a total valuation of $8.75B, which means they are bringing in around $4.5B, and recognizing a loss of roughly 50% on what was their biggest deal ever when it took place in 2015.

It was a silly acquisition in the first place, and their justification clearly came from a coke-addled fever dream.<p>Intel soon discovered the obvious, which is that customers with applications well-suited to FPGAs already use FPGAs.

Man I remember being excited when Intel bought Altera, maybe they&#x27;d bring FPGAs to the masses, then they proceeded to do nothing with them...

I used to work at Intel (around 1999) in their Jones Farm campus in Oregon. My employee stock grants from that time are still underwater.<p>This was the heyday at Intel. I left within a year because I noticed that the talent that was respected, compensated and influential at Intel was the sales engineers. I can&#x27;t pretend to have known that would lead to the decline of the company, but I knew that as an engineer uninterested in sales, that it wasn&#x27;t the place for me.

GPGPUs ended up becoming the AI&#x2F;cloud accelerators that FPGAs promised to be back when Intel bought Altera.<p>FPGAs are not ideal for raw parallel number crunching like in AI&#x2F;LLMs. They are more appropriate for predictable real-time&#x2F;ultra-low-latency parallel things like the the modulation and demodulation of signals in 5G base state stations.

Intel acquired Altera in December 2015 for $16.7 billion in cash.

Quick search shows Altera held 30% of the FPGA market. That puts AMD’s $50B acquisition of Xilinx (which holds ~50% of the market) in an awkward light. Using some extremely crude math, Xilinx’s fair market value might now be closer to ~$15B.<p>Did AMD massively overpay, or has the FPGA market fundamentally shifted? Curious to see how this new benchmark ripples into AMD’s stock valuation.

Should change title. They sold 51% at a valuation of $8.75B, so cash in is ~ $4.29B.

When Intel acquired Altera, Altera’s market share was at 36% and Xilinx at 51%. Today Xilinx remains at ~50% while Altera’s share has dropped to 29%. Altera has lost share to Microchip and Lattice.<p>I’ve said it before, Intel is where technology companies go to die. Fortunately while Altera is probably a mess of useless Intel drone MBAs, there’s a decent core that can be salvaged. Best of luck to them.

Props to Intel duping AMD to buy Xillix for whooping $50B

Apparently, the FPGA industry wasn&#x27;t large enough for two major players. Maintaining an extremely specialized developer ecosystem for a relatively small niche can&#x27;t have been cheap. Almost zero cross-over too, since FPGA tooling is much too foreign to be repurposed for other architectures. I suspect this move will make it a bit harder for Intel to collect &quot;developer mindshare&quot; for their other hyped up stuff because no one likes having the rug pulled out from under them. Hope AMD can make a better job with Xilinx than what Intel could with Altera.

I wonder if we&#x27;ll see more Intel sell-offs, as Tan et al try to get things under control.<p>Will we see an AMD-esque fab spin-off?

What a waste! I can never understand corporate thinking and how CEOs get such massive fucking pay for decisions like this.<p>Intel paid $16.7 billion in 2015 and sold it for $8.75 billion?! What about all the money dumped into Altera from 2015 to 2025? How much was that? Is Intel just handing over the FPGA market to AMD?

I cannot help myself. My brain parks &quot;Altera&quot; right beside the Weyland and Jupiter Mining corps.<p><a href="https:&#x2F;&#x2F;subnautica.fandom.com&#x2F;wiki&#x2F;Alterra_Corporation" rel="nofollow">https:&#x2F;&#x2F;subnautica.fandom.com&#x2F;wiki&#x2F;Alterra_Corporation</a>

That whole acquisition always was a head-scratcher to me. OK, you pay nearly 17B for the thing, and then do absolutely nothing with it. How does that work? Even during its best years 17B was big money for Intel.

Leadership at Intel needs to go. They cannot be allowed to be C-level execs at any company.<p>Selling out to PE is a signal this company is about to get gutted and loaded to the tits with debt and management fees from PE.

I&#x27;m not surprised by this divestiture - Investor confidence in Alterra has been low ever since the disastrous loss of their brand new capital ship Aurora on its very first mission.

I left the hardware business in 1992 but seems that nothing has changed. People still think FPGAs are really cool and nobody cab figure out how to make money selling them.

Summary of the situation from The Register headline:<p>&gt;Intel flogs off majority stake in Altera to private equity for $4B<p>&gt;Buy high, sell low: FPGA biz cost x86 giant $16B decade ago<p>for those not up on this stuff

Was altera the thing they bought to do some really cool networking&#x2F;switching&#x2F;SDN stuff? Paging bcantrill.

Bravo, they managed to break even on their decade-old investment.<p>Should have stuffed it under the bed instead…

Seems quite cheap. If I was a state I&#x27;d buy it. Possibly give stake to the suitable university and then create internships and other learning opportunities. I would also subsidise products to SMEs and then invest more to ensure company can supply defence and other industries, decoupling the country from dependence on other countries from crucial tech.<p>I mean it&#x27;s a pipe dream, but why not.

Anyone who hoped Lunar Lake to buy Altera give thumbs up.

Has everyone already forgotten about Optane, too?

Looks like Intel is being stripped for parts.

Intel&#x27;s problem is that they&#x27;re trying to deliver short term shareholder value instead of long term stable value.

The business geniuses of intel bought Altera for nearly $17B in 2015. Now sold control at valuation barely half of that. After <i>official</i> inflation of over 30% during that time. Which means it lost over 2&#x2F;3 of its value, (take into account also the lost interest on that money). Given that they gave up control for half the money, it’s effectively as if it was relinquished for 1&#x2F;3 of what Intel paid for it. So far - no one of the responsible Intel execs paid any price for such atrocious loss of stakeholders’ value. They need to be in jail and lose their personal wealth to repay the stockholders.<p>The SEC should investigate them, see whether there was any inside trading to benefit from this horrible value loss.<p>This criminal lack of performance needs to be brought up during the upcoming shareholders meeting. Responsible must pay the price.<p>Would you hire again the Intel CEOs, head of Intel Capital, any members of Intel’s board of directors after such abysmal performance?