Altera in negotiation on private equity partner
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Intel expects to see a partnership with private equity on the spin out of its Altera FPGA business later this year.
The FPGA division saw revenue down in the first quarter as a result of excess inventories highlighted by CEO Sandra Rivera, see: CEO interview: Sandra Rivera of Altera on the move to Intel 18A
“This quarter, we formally rebranded our Programmable Solutions Group, “Altera, an Intel Company,” said Dave Zinsner, Intel chief financial officer. “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 revenue was $342 million, down significantly YoY, with results impacted by the inventory digestion following supply constraints in 2022 and ‘23. Altera’s $39m operating loss is a result of lower revenue and spending associated with standing up Altera as a standalone company.
“We continue to expect Altera to exit 2024 at a $2 billion revenue run-rate as inventory positions normalize,” said Zinsner.
Intel previously spun out its Mobileye business for automotive chips and IMS business for lithography masks.
“This puts Altera on a similar path as Mobileye,” said Zinsner. “We are excited about the future of both companies. By providing them with separation and autonomy, we believe we enhance their ability to capitalize on their growth opportunities in their respective markets and accelerate their paths to create value.
“Combined with IMS, our mask-writing equipment business, we believe these three assets represent more than a quarter of our overall market value today.”
Mobileye saw revenue of $239m in Q1 this year with an operating loss of $68m. Both were down meaningfully YoY due to a well-publicized drawdown of EyeQ customer inventory.
“With the inventory digestion process on track, financial results are expected to recover quickly,” he added.
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