Intel Corp. has shortlisted a group of private equity firms and corporate suitors for the next phase of bidding for its Altera division, according to sources familiar with the process. This move is part of Intel's broader efforts to streamline operations and optimize its business portfolio. Altera specializes in low-power programmable chips and has become a focal point in Intel's divestiture plans.
Private equity firms Francisco Partners and Silver Lake Management are among the contenders in the second bidding round, joined by Lattice Semiconductor Corp., Apollo Global Management, and Bain Capital. Intel has set a deadline in late January for bidders to formalize their proposals, the sources said, while noting that the process remains fluid, with the possibility of additional bidders entering or the sale not materializing.
Intel's representatives and those from the bidding firms have declined to comment on the matter. The process to divest Altera was initiated under former CEO Pat Gelsinger, who departed earlier this year. The company appears determined to proceed with plans laid out under Gelsinger's leadership, despite broader criticisms of the pace of Intel's strategic initiatives.
The Altera unit, acquired by Intel in 2015 for approximately $17 billion, is now estimated to be valued between $9 billion and $12 billion. According to insiders, proposals vary widely, from acquiring minority stakes of 20% to 30% to full ownership. For Lattice Semiconductor, with a market capitalization of $8 billion, pursuing a full acquisition would likely require the support of a financial partner.
Intel interim co-CEO and CFO David Zinsner recently discussed the divestiture process at the Barclays Global Technology Conference, referencing a prior transaction as a model. In 2023, Intel sold a 20% stake in its IMS Nanofabrication business to Bain Capital Special Situations in a deal valuing IMS at $4.3 billion. Later that year, Taiwan Semiconductor Manufacturing Co. acquired an additional 10% stake in IMS at the same valuation.
"Our thinking is we'll get another partner in, similar to what we did with the IMS business," Zinsner told investors during the conference.
Altera's strategic value lies in its specialization in programmable chips, a key component in emerging technologies. These chips are widely used across various industries, including telecommunications and automotive sectors, making the division an attractive asset for buyers aiming to expand their semiconductor portfolios.
