The private equity firm Silver Lake Partners LP is reportedly in advanced talks over the purchase of a majority stake in Intel Corp.’s programmable chip business unit Altera, having apparently won out over a number of other prospective suitors.

Bloomberg said in an exclusive report today citing anonymous sources that Silver Lake is now finalizing the finer details of the transaction. That suggests the talks are at an advanced stage, though it’s not clear yet when a deal may be announced. The exact size of Silver Lake’s stake in the unit is also yet to be determined, and the talks could still fall through, the source added.

Neither Silver Lake nor Intel responded to requests for a comment on the report, Bloomberg said.

Altera is a supplier of field-programmable gate arrays or FPGAs, which are specialized computer chips that can be programmed for specific workloads, making them more efficient than standard processors. Their customizable circuits can be optimized to increase the amount of processing power available for artificial intelligence workloads, for example, boosting their performance.

Besides AI workloads, FPGAs are used to power network devices, industrial equipment and various other systems. Customers simply adapt the chips to the desired task by modifying the onboard software, but once they have been set up, they cannot be reconfigured for an alternative task.

Silver Lake was reportedly competing with other private equity firms including Bain Capital LLC and Francisco Partners LLC, which had also expressed an interest in acquiring Altera. Silver Lake is very familiar with the technology industry, having previously been involved in deals to buy out stakes in companies such as Dell Technologies Inc., Qualtrics International Inc., Alibaba Group Holdings Ltd., Broadcom Inc. and NXP Semiconductors N.V. In January, the company said publicly for the first time it was looking into Altera as a possible acquisition target.

Intel previously acquired Altera for almost $17 billion in 2015. It primarily competes against Advanced Micro Devices Inc., which acquired the rival FPGA chipmaker Xilinx Inc. in 2022 for $49 billion.

It’s not clear how much money is involved in this new deal, but it should in any case provide Intel with a desperately needed cash boost, as the embattled chipmaker struggles to dig itself out of an enormous hole. The company has been bleeding revenue for years amid rising competition from AMD and others in key markets like personal computers and data center server chips, and it has failed to establish a significant presence in the market for AI chips.

Intel responded to this turn of events by announcing plans to spinoff its manufacturing business as a separate entity so it could focus on chip design. But its former Chief Executive Pat Gelsinger was dumped by Intel’s board in December before he could see that plan through. Now led by interim co-CEOs David Zinsner and Michelle Holthaus, the company looking at various options to cut costs, and those measures include selling off businesses such as Altera and its venture capital arm Intel Capital, which it can no longer afford to finance.

Under Gelsinger, Intel had originally planned to sell a minor stake in Altera and spin it off as a separate company ahead of an initial public offering, but it’s not clear if that’s still the plan, or if Silver Lake has other ideas.

Earlier this week, it was reported by the Wall Street Journal that rival chipmakers Broadcom and Taiwan Semiconductor Manufacturing Co. are looking at buying different parts of Intel’s business, with the former going after its core chip design unit, and the latter looking at its chipmaking factories. Intel’s stock gained more than 16% in trading today, buoyed by that report. The stock is now up 29% in the year to date, having slumped more than 60% in 2024.

Not everyone agrees that a sale is necessary, however. TheCUBE analysts Dave Vellante and David Floyer argued in their latest Breaking Analysis that it would be better for the U.S. technology industry for Intel to remain independent after selling off its foundry business, focusing solely on chip design.

Last month, Intel reported fourth-quarter earnings and revenue that topped Wall Street’s expectations, though its guidance for the current quarter came up light because of tepid demand for data center chips. The company continues to search for a permanent successor to Gelsinger.

Photo: Intel