Intel trims 2025 operating expenses outlook after Altera deconsolidation

Daniel Nenni

Daniel Nenni

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Investing.com -- Intel revealed in a filing on Monday that it has lowered its full-year 2025 adjusted operating expense target following the sale of a majority stake in Altera to private equity firm Silver Lake.

The company now expects non-GAAP operating expenses of $16.8 billion this year, compared with a previous forecast of $17 billion.

The change reflects the deconsolidation of Altera, which ceased to be fully included in Intel’s results after the deal closed on Sept. 12.

Intel said Silver Lake acquired a 51% equity interest in Altera for an equity value of about $3.3 billion, with Intel retaining 49%.

Altera contributed $816 million in revenue in the first half of 2025, with a gross margin of 55% and operating expenses of $356 million.

Intel said its consolidated financials for the third quarter will include Altera’s results through Sept. 11, before shifting to minority-interest accounting.

The company also reaffirmed its 2026 non-GAAP expense target of $16 billion. On a GAAP basis, Intel expects 2025 operating expenses of about $21.9 billion, with adjustments for share-based compensation, restructuring charges and other items narrowing the figure to its non-GAAP projection.

The Altera transaction marks Intel’s latest effort to streamline operations.

 
Hello Daniel –

Today marks the beginning of a new era for Altera. With the close of Silver Lake’s acquisition of a 51% stake, Altera is now the world’s largest pure-play FPGA solutions provider. Independence positions Altera to innovate faster and invest in developing an even stronger portfolio of advanced FPGA solutions.

For FPGA customers, Altera’s focus will be to leverage a full-stack FPGA portfolio and its broad ecosystem to enable the broad markets that FPGAs serve, from low-cost embedded applications to high-performance data centers and telco equipment. Independence also gives Altera the freedom to build FPGA solutions on leading nodes with any foundry, in any region, ensuring supply resiliency and flexibility for its customers worldwide.

By being 100% focused on FPGAs, Altera is better positioned to help customers solve their most complex challenges, while accelerating innovations with programmable logic that is secure, scalable, and built for the future.

Key Insights:
  • Altera is now a stronger, nimbler company, with an unwavering commitment to excellence and putting FPGA customers’ business needs first.

  • As the industry’s largest pure-play FPGA solutions provider, Altera will operate with greater speed and agility to drive faster innovation, deliver advanced FPGA solutions and offer increased support for its customers and partners worldwide.  
  • Silver Lake is a global leader in technology investing with a proven track record of growing and scaling category-defining semiconductor businesses, including Broadcom and NXP, and successfully carving out businesses from larger parent companies (including Avago from Agilent).

  • With flexible, resilient supply across leading nodes and foundry partners, Altera ensures customers can build with confidence anywhere in the world.
You can read the full press release in the Altera newsroom and below. If you have any questions or would like additional context, we’d be happy to coordinate time with an Altera representative.

All the best,

Chase


Altera Closes Silver Lake Investment to Become World’s Largest Pure-play FPGA Solutions Provider

Independence accelerates innovation, enables customer focus, and drives long-term value creation

SAN JOSE, Calif. and MENLO PARK, Calif. , Sept. 15, 2025 --Altera Corporation, a leader in FPGA innovations, today announced that Silver Lake, a global leader in technology investing, has completed its acquisition of a 51% stake in the company from Intel Corporation, which will retain a 49% stake, underscoring shared confidence in Altera’s growth.

Completion of the transaction establishes Altera as the world’s largest independent, pure-play FPGA solutions provider, empowering the company to accelerate innovation for customers and partners by providing software tools, development kits, IP and design service resources used to build complete FPGA solutions.

Altera delivers a comprehensive, full-stack FPGA portfolio featuring industry-leading fabric, efficient performance, and easy-to-use, scalable software for customers and developers. With the Agilex family of products, Altera’s advanced FPGA solutions make AI more accessible by lowering entry costs while enhancing performance, reliability, and security. With flexible, resilient supply across leading nodes and foundry partners, Altera ensures customers can build with confidence anywhere in the world.

Expanding Leadership Supported by Silver Lake
With operational independence and Silver Lake’s backing, Altera has additional agility and resources to drive faster innovation and deliver advanced FPGA solutions, with increased support for customers and partners worldwide.

Silver Lake’s expertise in partnering with management teams to scale and transform category-leading semiconductor companies will support Altera’s expansion across key sectors, including industrial automation, audio/video, robotics, aerospace, defense, data centers, telecommunications and edge AI.

“We are thrilled to partner with Silver Lake as this transformative investment positions us to accelerate innovation and reinforce our leadership in the FPGA market at a time when AI applications are fueling demand for programmable logic,” said Altera CEO Raghib Hussain. “We are laser-focused on optimizing our portfolio and unleashing the great innovation and talent of this organization to support the evolving needs of customers looking to capitalize on the significant opportunities presented by AI.”

“Altera is uniquely positioned at the forefront of the FPGA industry and AI revolution. Our investment reflects our confidence in Altera’s technology leadership, its commitment to deliver for customers, and its significant growth potential,” said Kenneth Hao, Silver Lake Chairman and Managing Partner. “We are proud to support Raghib and the talented Altera team as they embark on this exciting next chapter.”

About Altera
Altera is a leading supplier of programmable hardware, software, and development tools that empower designers of electronic systems to innovate, differentiate, and succeed in their markets. With a broad portfolio of industry-leading FPGAs, SoCs, and design solutions, Altera enables customers to achieve faster time-to-market and unmatched performance in applications spanning industrial automation, audio/video, robotics, aerospace, defense, data centers, telecommunications, edge AI and more. For more information, visit www.altera.com.


About Silver Lake
Silver Lake is a global technology investment firm, with approximately $104 billion in combined assets under management and committed capital and a team of professionals based in North America, Europe and Asia. Silver Lake’s portfolio companies collectively generate nearly $252 billion of revenue annually and employ approximately 433,000 people globally.
 
samwilde said:
AMD still owns Xilinx and Chinese FPGA makers plus Lattice have been nibbling at the low end of the market for quite some time.
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I think the Altera acquisition was a huge loss/distraction for Intel. It was $16.7B in cash! And that was back when $16.7B was a lot of money. :ROFLMAO: AMD went and bought Xilinx and put Altera in the review view mirror.

Will Intel divest the remaining shares of Altera? I thought they would sell the whole thing. Surely it is no longer strategic?
 
I think the idea was to get Altera to use Intel's fabs to increase their wafer volume.
But a lot of people don't want expensive high end FPGAs. And Intel traditionally got rid of its old equipment. So they lack fabs with legacy nodes.
 
Daniel Nenni said:
The company now expects non-GAAP operating expenses of $16.8 billion this year, compared with a previous forecast of $17 billion.
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So the Altera spinoff only saves Intel $200 million in 2025. That’s a lot of money to me, but compared to Intel’s $53 billion in annual revenue (2024), it’s just a tiny fraction, 0.377%.
 
hist78 said:
So the Altera spinoff only saves Intel $200 million in 2025. That’s a lot of money to me, but compared to Intel’s $53 billion in annual revenue (2024), it’s just a tiny fraction, 0.377%.
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Intel (INTC) shares advanced nearly 6% Monday when the struggling semiconductor manufacturer announced that it was lowering its outlook for full-year costs following the sale of a majority stake in its Altera programmable chip business.


www.investopedia.com

Intel Stock Rises After Chipmaker Cuts Forecast for Expenses

Intel shares advanced Monday when the struggling semiconductor manufacturer announced that it was lowering its outlook for full-year costs following the sale of a majority stake in its Altera programmable chip business.
www.investopedia.com www.investopedia.com
 
hist78 said:
So the Altera spinoff only saves Intel $200 million in 2025. That’s a lot of money to me, but compared to Intel’s $53 billion in annual revenue (2024), it’s just a tiny fraction, 0.377%.
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Or, the $200 million savings is 1.18% of the originally forecasted $17 billion operating expenses.
 
Daniel Nenni said:
I think the Altera acquisition was a huge loss/distraction for Intel. It was $16.7B in cash! And that was back when $16.7B was a lot of money. :ROFLMAO: AMD went and bought Xilinx and put Altera in the review view mirror.

Will Intel divest the remaining shares of Altera? I thought they would sell the whole thing. Surely it is no longer strategic?
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Intel paid 16.5B for Altera and to help pay for that acquisition tmg had to do vsp and isp a whole bunch of experienced engineers. It started their whole down turn or downfall.
 
Daniel Nenni said:
View Lip-Bu Tan’s graphic link
Lip-Bu Tan
12 hours ago

Congrats Ken Hao & SilverLake to become 51% new shareholder of Altera and Intel is proud to have 49% significant shareholder. We are super excited to have my close friend and well respected semiconductor executive, Raghib to be new CEO Altera. We are excited and looking forward to building “new Altera” under Ken and Raghib leadership.

Altera Closes Silver Lake Investment to Become World’s Largest Pure-play FPGA Solutions Provider
altera.com
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I guess that answers my question, Intel will keep Altera for now. I remember back in the day when Altera and Xilinx were battling it out in the trenches. It was quite the competition. Xilinx was at UMC and Altera was close with TSMC. Back then FPGAs were use as process pipe cleaners due to their high density cells. Kind of like SRAM is used today.

Then Xilinx went to TSMC an 28nm and beat Altera. Altera rolled the dice and went to Intel and the rest, as they say, is history. I was working with Altera when they were at TSMC, great company. Intel really crushed them. I wonder if Altera will go back to TSMC? Raghib Hussain certainly knows TSMC from his Cavium days. Cavium had a great exit, he is a top notch CEO, absolutely.
 
Daniel Nenni said:
I guess that answers my question, Intel will keep Altera for now. I remember back in the day when Altera and Xilinx were battling it out in the trenches. It was quite the competition. Xilinx was at UMC and Altera was close with TSMC. Back then FPGAs were use as process pipe cleaners due to their high density cells. Kind of like SRAM is used today.

Then Xilinx went to TSMC an 28nm and beat Altera. Altera rolled the dice and went to Intel and the rest, as they say, is history. I was working with Altera when they were at TSMC, great company. Intel really crushed them. I wonder if Altera will go back to TSMC? Raghib Hussain certainly knows TSMC from his Cavium days. Cavium had a great exit, he is a top notch CEO, absolutely.
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Altera could have kept TSMC as its manufacturing partner. Did Altera let its emotions overrun its judgment because Xilinx had started using TSMC at that time?
 
Dr. Ian Cutless's opinion is to have dual sourcing and flexibility of options.
In fact, Intel has a surplus of production lines, and they don't have to compete with other companies for them, so in a sense, supply may be stable.
 
samwilde said:
I think the idea was to get Altera to use Intel's fabs to increase their wafer volume.
But a lot of people don't want expensive high end FPGAs. And Intel traditionally got rid of its old equipment. So they lack fabs with legacy nodes.
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Rather than being a legacy node,
This is because ALTERA's low-end and low-price products were not well-stocked.

Even if the FPGA is supplied for a long period under a long-term contract, new FPGAs will continue to be released and new processes will be used.
The problem may be that Intel focused on high-end products rather than low-end products during the 22nm and 14nm generations.
It doesn't really matter how new or old the manufacturing process is.
In any case, recent new FPGAs use newer processes even at the low end.

They have only just recently released the successor to their low-end FPGA lineup, which was made on TSMC nodes before the Intel acquisition.
It's about agilex3
 
Daniel Nenni said:
True and Intel 14nm even more so versus TSMC 16nm. Unfortunately the Altera integration into Intel went much slower than expected so the process advantage was not leveraged. I remember when Intel sent the first PDK to Altera it was horrible by comparison to TSMC.
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Intel 14nm PDK had no standard cell library, no sram pdk and no ip library . Altera was asked to create all these ip collateral by themselves hence the massive delays. You would think that they would have learnt from post mortem from icf but nope ...
 
essiah said:
Intel 14nm PDK had no standard cell library, no sram pdk and no ip library . Altera was asked to create all these ip collateral by themselves hence the massive delays. You would think that they would have learnt from post mortem from icf but nope ...
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incredible. I was one of the 1st ICF1.0 victim/customer. sad to see almost no improvement was done after that
 
essiah said:
Intel 14nm PDK had no standard cell library, no sram pdk and no ip library . Altera was asked to create all these ip collateral by themselves hence the massive delays. You would think that they would have learnt from post mortem from icf but nope ...
Click to expand...

All true! The Intel 22nm PDK included a DRC file that was redacted! How do you design to a redacted DRC deck? :ROFLMAO:

Xilinx/TSMC 16nm product shipped about 1 year earlier than Altera Intel/14nm from what I remember. In the FPGA business being first to a process node was a very big deal. Altera/TSMC beat Xilinx/UMC until Xilinx moved to TSMC at 28nm. Xilinx has been first ever since.
 
Daniel Nenni said:
All true! The Intel 22nm PDK included a DRC file that was redacted! How do you design to a redacted DRC deck? :ROFLMAO:

Xilinx/TSMC 16nm product shipped about 1 year earlier than Altera Intel/14nm from what I remember. In the FPGA business being first to a process node was a very big deal. Altera/TSMC beat Xilinx/UMC until Xilinx moved to TSMC at 28nm. Xilinx has been first ever since.
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There were 2 different teams doing the drc. In tmg the golden drc was done using hercules/icv based on design rules from RD, in ICF another diffetent team does the calibre deck based not on design rules but on test cases matching run from Hercules/icv code. Of course there were escapes and the calibre drc deck was pulled due to quality issues.
 
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