While the news about Altera being up for grabs isn’t new, there are fresh bytes on its sale to either an FPGA industry player like Lattice Semiconductor or private equity firms such as Francisco Partners, Silver Lake Management, and Bain Capital. Altera’s transition from Intel’s lap to an independent entity is all set, and the only hiccup is money.
Start with Lattice, whose market value is $8 billion. So, to acquire Altera, Lattice will inevitably need a financial partner. On the other hand, proposals from private equity firms value Altera at $9 billion to $12 billion, far below the $17 billion Intel paid to acquire it.
Altera, which once made the FPGA duopoly along with Xilinx, was acquired by then-cash-rich Intel in 2015. This sparked a guessing game in the semiconductor industry regarding why the CPU kingpin had grabbed an FPGA player. Archrival AMD followed suit by snapping Xilinx in 2020.
However, while industry watchers were mulling over the ultimate objectives of CPU makers acquiring the FPGA business and how it could potentially relate to their server and data center roadmaps, trouble started brewing at Intel. Next, we heard about Intel considering to spinning off Alter to deal with its capital crunch. The decision was made by then-CEO Pat Gelsinger.
Figure 1 Sandra Rivera has been named the CEO of Altera. Source: Intel
According to a new Bloomberg report, Intel has shortlisted several buyout firms for the next phase of bids and has set a deadline of the end of January for bidders to formalize their offers. However, while the Santa Clara, California-based chipmaker seems committed to executing Altera’s spin-off, the price tag has become a stumbling block.
Intel’s co-CEO and former CFO David Zinsner has hinted about a way out if Intel doesn’t get a financially viable offer. He mentioned the possibility of a deal like IMS Nanofabrication, an industry leader in multi-beam mask writing tools required to develop extreme ultraviolet lithography (EUV).
In June 2023, Intel sold 20% of its stake in IMS to Bain Capital in a deal that valued IMS at around $4.3 billion. Three months later, Intel sold an additional 10% stake in IMS to TSMC. We’ll see in 2025 which way things go, but it’s worth remembering that Intel doesn’t have an enviable history regarding acquisitions.
Figure 2 Altera continues to launch an array of FPGA hardware, software, and development tools to make its programmable solutions more accessible across a broader range of use cases and markets. Source: Intel
Founded in 1983, Altera is an important company. So, at a time when the AMD-plus-Xilinx combo is doing well, it’s crucial to watch how the future of Altera 2.0 is shaped in 2025. A successful outcome will provide Intel with a much-needed cash boost and offer Altera greater independence to proactively innovate in the FPGA design realm.
Related Content
- Intel to Buy Altera for $16.7B
- Intel, Altera End Acquisition Talks
- Intel to Accelerate Altera, Says CEO
- The State of the FPGA Union is Uncertain
- How will Intel’s purchase of Altera affect embedded space?
The post Who will get Altera in 2025? appeared first on EDN.