Intel Corporation has entered into a definitive agreement to sell a 51% stake in its Altera business to Silver Lake for $8.75 billion, marking a significant shift as Altera becomes an independent entity.

This sale is part of Intel's broader strategy to streamline its operations and focus on core areas amid ongoing financial pressures.

Kenneth Hao, chairman of Silver Lake, described the investment as a 'once-in-a-generation opportunity' to enhance Altera's technology leadership in advanced semiconductors, particularly in AI-driven markets.

Intel has been facing financial struggles and has lagged behind competitors in advanced manufacturing processes, resulting in substantial losses.

As part of the transaction, Intel will receive $3.4 billion in cash, which is expected to enhance its financial structure.

The FPGA market is experiencing rapid growth, projected to increase from $12.1 billion in 2024 to $25.8 billion by 2029, highlighting the importance of Altera's focus on innovation.

This move aligns with broader trends in the tech industry where companies are reassessing their investments in response to market dynamics.

Following the announcement of the sale, Intel's stock price rose by approximately 6% in morning trading, indicating a positive market reaction.

The announcement includes forward-looking statements that carry risks and uncertainties regarding the completion and benefits of the transaction.

FPGAs are versatile devices used in various applications, including telecommunications, financial systems, and hardware prototyping, underscoring Altera's strategic importance in the semiconductor industry.

Raghib Hussain, who will take over as CEO of Altera in early May 2025, emphasized the company's potential to deliver innovative FPGA-based solutions, especially in AI-driven computing.

The sale aims to raise cash for Intel's capital-intensive manufacturing operations, particularly as it prepares to scale its new Intel 18A process node.