Intel is actively seeking an investor to purchase a stake in its subsidiary Altera, a programmable chip unit valued at approximately $17 billion, according to reports from CNBC. This strategic move comes at a crucial time as Intel navigates significant challenges within its operations while the United States aims to bolster its domestic chip industry for enhanced national security.
Intel's pursuit of funds is reportedly for at least a minority stake in Altera, with possibilities for acquiring a majority stake discussed among potential investors, according to sources familiar with the matter. This development emerges amidst a backdrop of industry-wide changes, as major semiconductor firms like ASML and TSMC release promising earnings reports underscoring robust growth in AI chip markets.
Intel, on the other hand, continues to contend with manufacturing setbacks and competitive pressures, particularly from advancements in artificial intelligence technology. The company has faced a sharp 55% decline in its stock value this year, further emphasizing the urgency for strategic moves such as this potential stake sale.
In alignment with President Joe Biden's directives for revamping the U.S. semiconductor landscape, Intel has received substantial financial backing, totaling $11.5 billion, from federal initiatives like the CHIPS Act. Despite these funds aimed at strengthening its position, Intel's CEO, Pat Gelsinger, has communicated to employees the need for prudent cash management to improve its fiscal stability.
Gelsinger highlighted that the sale of a portion of Intel's stake in Altera aligns with long-term plans towards Altera's IPO aspirations. As discussions progress, Intel's maneuvers reflect broader market strategies, paralleled by Qualcomm's reported interest in a takeover and Intel's commitment to recalibrate its financial strategies amidst a competitive and evolving semiconductor industry landscape. Intel has yet to formally comment on these potential transactions, as inquiries from Business Insider await response.
