Altera in Talks with Private Equity Partner

Intel is anticipating a significant move in the near future with a partnership with private equity on the spin out of its Altera FPGA business. The company's FPGA division experienced a decline in revenue during the first quarter, largely due to excess inventories as highlighted by CEO Sandra Rivera.

During an interview, Intel's chief financial officer, Dave Zinsner, stated, “This quarter, we formally rebranded our Programmable Solutions Group, 'Altera, an Intel Company.' We look forward to bringing in a private equity partner this year to help prepare the company for an IPO in the coming years.” Altera's revenue for the quarter was reported at $342 million, showing a significant year-over-year decrease.

Zinsner explained that the results were impacted by inventory digestion following supply constraints in 2022 and 2023, leading to an operating loss of $39 million for Altera. This loss was attributed to lower revenue and spending associated with establishing Altera as a standalone company. Looking ahead, Zinsner expressed optimism, stating, “We continue to expect Altera to exit 2024 at a $2 billion revenue run-rate as inventory positions normalize.”

Intel has a history of spinning out its business divisions, such as the Mobileye business for automotive chips and IMS business for lithography masks. Zinsner drew parallels between the spin out of Altera and Mobileye, emphasizing the company's excitement about the future prospects of both entities. By providing them with separation and autonomy, Intel believes it can enhance their ability to capitalize on growth opportunities and accelerate their paths to creating value.

Mobileye, which reported revenue of $239 million in the first quarter of this year, also experienced a year-over-year decline along with an operating loss of $68 million. This decline was attributed to a drawdown of EyeQ customer inventory. Zinsner expressed confidence in the recovery of financial results, stating, “With the inventory digestion process on track, financial results are expected to recover quickly.”