Lattice Semiconductor mulls bid for Intel’s Altera

Low-power FPGA vendor Lattice Semiconductor Corp. (Hillsboro, Oregon) is considering making a bid for Altera, Intel’s programmable logic subsidiary, according to Bloomberg.

As a smaller company Lattice is seeking help from a private equity company in its bid for Altera, the report said. Meanwhile Francisco Partners, Bain Capital and Silver Lake Management are also considering investment in Altera.

What remains unclear is the pace at which loss-making Intel is prepared to divest itself of its programmable logic subsidiary.

Intel’s plan of record is for the gradual disposal of Altera by taking the company public. Altera’s financial results were separated out from Intel’s in April 2024 with a plan to bring in a private equity partner to take company towards an IPO in the coming years. However, Intel CEO has also said he wants to settle Altera’s future by early in 2025.

However, such are the depth of Intel’s financial problems that it may need to make trade sale of Altera sooner.

This may be the case even if it means selling Altera at a loss. Intel paid about US$16.7 billion for Altera in an all-cash transaction that completed late in 2015. In addition, private equity firms may not wish to enter into long-term deals with Intel, a company whose own future uncertain. There are plans to put distance between Intel’s processor product activity and its manufacturing operations, which have been labelled Intel Foundry. This could lead to a splitting-up of the company.

In the 3Q24 Altera made a US$9 million operational loss on sales of US$412 million, down 44 percent on the same quarter a year before.

In Lattice’s third quarter, under incoming CEO Ford Tamer, the company made a net income of US$7.2 million on revenues of US$127.1 million, down 33.9 percent compared with the same quarter a year before.

Both AMD and Marvell have also been linked to a possible purchase of Altera, whose FPGAs are found telecom and networking applications.