Intel to Decide Fate of Altera and Other Divisions

Intel is expected to announce a major reform plan at its board meeting this month, spinning off some unnecessary businesses and adjusting capital expenditures to revive the company's financial prospects.

According to the latest leak from a source, Intel's top brass is considering selling its programmable chip division, Altera, as Intel is no longer able to allocate funds from profits to support project development. There is also a possibility that Intel may split and sell its chip foundry division to buyers such as TSMC.

Morgan Stanley and Goldman Sachs Group are reportedly providing consulting services for Intel. The company's management is discussing viable department sale plans, but no decision has been made yet, which means there could be more changes before the meeting.

The board meeting in mid-September is crucial for Intel and will determine the company's future development path. Just before this, Intel announced in August that it would suspend dividend payments and lay off 15% of its workforce, highlighting the severity of its operational situation.

The rumored Altera division, which is suspected to be put up for sale, was acquired by Intel for $16.7 billion in 2015 and became Intel's Programmable Solutions Division. However, in March this year, the division was rebranded as Altera as a new company.

At the time, Intel envisioned that while maintaining absolute control over Altera, it would introduce new investments and expected to promote the company for an IPO in two to three years. This move may have sown the seeds for Intel's financial resource crunch.

Apart from Altera, Mobileye and Intel's IFS foundry businesses have both gone through the process of being split off into independently operated entities. Among them, Mobileye has been fortunate enough to go public.

The rumor of Altera being on the adjustment list also exposes Intel's struggle in the AI field. Altera was the largest acquisition in Intel's history and was seen as a key division for Intel in programmable gate arrays (FPGAs) to aid the company's artificial intelligence development.

Looking at the FPGA market, Altera and Xilinx hold 90% of the market share. The latter was acquired by AMD in 2020, and its valuation has soared to $50 billion by 2022.

But before Intel and AMD could compete in the FPGA field, Altera first faced the risk of changing hands. According to sources, U.S. chipmaker Marvell Technology is one of the potential buyers for Altera.