Intel Considering Sale of Altera, Marvell as Potential Buyer #
On September 1, Reuters reported that Intel CEO Pat Gelsinger and his core management team are working on a major strategic overhaul that will be presented to the company’s board later this month. This plan aims to revitalize Intel’s market position by shedding non-core business units and cutting costs.
Strategic Focus: Divesting Non-Core Assets #
The core of the strategy focuses on two main points:
- Selling non-core business units, including the Altera programmable chip division, in order to ease financial burdens and optimize resources. Given Intel’s current difficulties in maintaining the high operational costs of these units, this move is seen as essential.
- Adjusting capital expenditure strategy, with a more cautious approach to factory expansion projects. Intel may even consider pausing or canceling the $32 billion factory construction in Germany, which had previously been delayed.
Sources also revealed that Gelsinger and his team will present these plans at a board meeting scheduled for mid-September. This will mark the first public disclosure of the proposed changes. Notably, Intel has also hired external consulting support from major investment banks like Morgan Stanley and Goldman Sachs to help assess which business units should be kept and which should be sold.
Financial Struggles and the Future of Altera #
Intel’s disappointing Q2 earnings report, published in August, led to several significant decisions:
- The company announced a dividend suspension.
- Intel is cutting its workforce by 15% and has set a target to save $10 billion.
- 2025 capital expenditure is expected to drop by 17%, totaling $21.5 billion.
These moves highlight Intel’s struggles, especially in the face of intense competition from AI chip leaders like Nvidia, whose market capitalization has surged to $3 trillion—a stark contrast to Intel’s shrinking market value, which has now fallen below the $100 billion mark.
Altera’s Potential Sale #
Altera, a programmable chip division acquired by Intel in 2015 for $16.7 billion, could be next on the chopping block. Intel had considered splitting off Altera and potentially taking it public, but recent reports suggest that the company may instead seek to sell the division outright. Marvell, a semiconductor company seeking to expand, is considered a potential buyer.
The mid-September board meeting will be a critical moment for Intel, not only to assess its immediate financial health but also to determine the long-term direction of its business strategy. With the changing market environment, Intel’s ability to successfully implement this overhaul will be closely watched by the industry and investors alike.
Intel has not yet commented on the reports, but there are high expectations that Gelsinger and his team will deliver a convincing plan to restore the company’s market confidence.