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Intel sells 51% stake in Altera to private equity firm on a $8.75B valuation
- bigfatkitten 2y agoIt was a silly acquisition in the first place, and their justification clearly came from a coke-addled fever dream. Intel soon discovered the obvious, which is that customers with applications well-suited to FPGAs already use FPGAs.
- georgeburdell 2y agoIf AMD did the same thing years later, was it really that foolish?
- stonogo 2y agoYes, because AMD is fabless, and Xilinx didn't suddenly have to figure out how to work around Intel's production problems.
- mschuster91 2y ago> Intel soon discovered the obvious, which is that customers with applications well-suited to FPGAs already use FPGAs. Yes, but pairing an FPGA somewhat tightly integrated with an actually powerful x86 CPU would have made an interesting alternative to the usual FPGA+some low end ARM combo that's common these days.
- bigfatkitten 2y agoApplications that benefit from the Zynq-style combination (e.g. radio systems) generally take that approach because they have SWaP concerns that preclude the use of big x86 CPUs in the first place.
- michaelt 2y agoSure, if they wanted to intel could have done what nvidia did with CUDA: Put the tech into everything, even their lowest end consumer devices, and sink hundreds of millions into tooling and developer education given away free of charge. And maybe it would have lead somewhere. Perhaps. But they didn't.
- danielmarkbruce 2y agoIt was the thought at the time that they'd do this. It's amazing that they don't seem to have actually tried ? Any sense as to why or what went wrong?
- michaelt 2y agoI wasn't there, but I've always imagined the conversation went something like this: Intel: Welcome, Altera. We'd like you to integrate your FPGA fabric onto our CPUs. Altera: Sure thing, boss! Loads of our FPGAs get plugged into PCIe slots, or have hard or soft CPU cores, so we know what we're doing. Intel: Great! Oh, by the way, we'll need the ability to run multiple FPGA 'programs' independently, at the same time. Altera: Ummmm Intel: The programs might belong to different users, they'll need an impenetrable security barrier between them. It needs full OS integration, so multi-user systems can let different users FPGA at the same time. Windows and Linux, naturally. And virtual machine support too, otherwise how will cloud vendors be able to use it? Altera: Uh Intel: We'll need run-time scaling, so large chips get fully utilised, but smaller chips still work. And it'll need to be dynamic, so a user can go from using the whole chip for one program to sharing it between two. Intel: And of course indefinite backwards compatibility, that's the x86 promise. Don't do anything you can't support for at least 20 years. Intel: Your toolchain must support protecting licensed IP blocks, but also be 100% acceptable to the open source community. Intel: Also your current toolchain kinda sucks. It needs to be much easier to use. And stop charging for it. Intel: You'll need a college outreach program. And a Coursera course. Of course students might not have our hardware, so we'll need a cloud offering of some sort, so they can actually do the exercises in the course. Altera: I guess to start with we Intel: Are you profitable yet? Why aren't you contributing to our bottom line?
- 2y ago
- komadori 2y agoDo you think AMD's decision to buy Xilinx was any better or not?
- Alupis 2y agoPerhaps we can say it was less of a distraction for AMD, given AMD is not having the basic execution issue that Intel is currently suffering.
- rcxdude 2y agoAnd less disastrous for Xilinx, given they could basically just keep going as they were before, instead of being significantly diverted onto a sinking ship of a process.
- danielmarkbruce 2y agoThere was some hope at the time that FPGAs could be used in a lot more applications in the data center. It is likely still feasible. Remember Hennessy published: https://www.doc.ic.ac.uk/~wl/teachlocal/arch/papers/cacm19golden-age.pdf https://www.doc.ic.ac.uk/~wl/teachlocal/arch/papers/cacm19go... And maybe this is/was a pipe dream - maybe there aren't enough people with the skills to have a "golden age of architecture". But MSFT was deploying FPGAs in the data center and there were certainly hopes and dreams this would become a big thing.
- bigfatkitten 2y agoThat was certainly the dream, but unfortunately for them it didn't turn out to be a new market.
- danielmarkbruce 2y agoI don't know enough about hardware to know why - why didn't this story play out as hoped?
- smj-edison 2y agoI'm just a casual observer, but I'm pretty sure one hard thing about FPGAs is preventing abuse. A customer could easily set up a ring oscillator that burns out all the LUTs. Another thing is FPGAs are about 10x slower than dedicated logic, so CPUs/GPUs beat them for a lot of applications. Plus, there's not a lot of logic designers in the first place. Software skills don't transfer over very well. For example, a multiplier is about the size of 8kb of RAM, so lookups and complex flow are way more expensive than just multiplying a value again (kinda like GPUs, except if you only had an L1 cache without main memory).
- smj-edison 2y agoNot sure why I'm being downvoted, would those who downvoted me explain why? I try to be accurate so if I missed any important details I'd like to know :)
- matt3210 2y agoIt made their stock pop for a while which was all that mattered to Brian Krzanich who took the bonus and left the mess in the hands of Bob Swan who did the same things and left the mess ... (recursion her).
- nativeit 2y ago> Intel soon discovered the obvious, which is that customers with applications well-suited to FPGAs already use FPGAs. So selling FPGA's was a bad move? Or was the purchase price just wildly out-of-line with the--checking...$9.8B annual market that's expected to rise to $23.3B by 2030?
- bcrl 2y agoIntel can't even act as a functional foundry for internal customers.
- dbuder 2y agoIt was a forced acquisition, iirc they made promises to Altera to get them to use their foundry, failed to keep those promises and could either get sued and embarrassed or just buy Altera outright for about what they were worth before the deal.
- Alupis 2y agoI wonder if we'll see more Intel sell-offs, as Tan et al try to get things under control. Will we see an AMD-esque fab spin-off?
- nxobject 2y agoWould market regulators allow a single buyer to acquire all of Intel's fabs in one go?
- Alupis 2y agoMy guess would be no, but I could be wrong. The current administration clearly wants more domestic capability, so even if someone like TSMC/Samsung/etc wanted to acquire as part of their US operations, my gut says it would be challenged. When AMD spun off their fabs into what became Global Foundries, it was difficult for many to see the upside. However, today, it seems not being tied to any particular fab/tech is one of AMD's biggest advantages.
- _ea1k 2y agoI'd guess that they'll continue to sell off mobileye over time.
- DebtDeflation 2y agoBeyond ensuring adequate cash flow, they need to be 100% focused on getting 18A shipping in volume as soon as possible rather than financial engineering stuff.
- rsp1984 2y agoShould change title. They sold 51% at a valuation of $8.75B, so cash in is ~ $4.29B.
- deleted 2y ago[deleted]
- voxadam 2y agoI've updated the title as best as I could within the constraints of the max length.
- mastax 2y agoIntel acquired Altera in December 2015 for $16.7 billion in cash.
- nativeit 2y agoIf only someone could have come up with a plausibly profitable use-case for advanced FPGA's and highly performant, efficient, real-time processing or hardware acceleration in those intervening years? What are ya gonna do?
- xadhominemx 2y agoWell the thesis was DC accelerators but the world went with ASSPs.
- svnt 2y agoFor those keeping score at home, 51% sold at a total valuation of $8.75B, which means they are bringing in around $4.5B, and recognizing a loss of roughly 50% on what was their biggest deal ever when it took place in 2015.
- Jach 2y ago"In December 2015, Intel acquired Altera for $16.7 billion in cash." $21.5 bn inflation adjusted. Amazing ten year performance.
- addaon 2y agoSure, it was down 60%. But the real question is whether it outperformed Intel as a whole, and outperformed other internal investments Intel could make. I certainly wouldn't think that a 2015 dollar anywhere else within Intel is worth more than 40¢ today, given how they've been running.
- janalsncm 2y agoJust to put numbers to it, Intel was $34 in 2016. It’s $20 now. So a dollar in Intel in 2016 would be worth 59 cents today. ETA they also paid out almost $10 in dividends.
- scottyah 2y agoOr they got what they wanted from it and are selling off the rest, like when Google bought Motorola Wireless for the Patents then sold off the non-googly employees, culture, and brand for cheap.
- thot_experiment 2y agoRest in Peace Altera I guess? I still drink out of my color changing Altera mug (that's long stopped changing color) most days. PE ruins everything so it's only a matter of time before they're gutted and sold for scraps by the vultures at Silver Lake. (though honestly the writing was on the wall since the Intel acquisition I had held onto some hope) If only we had a functioning government interested in actually maintaining our technological dominance and enforcing/expanding antitrust legislation. I wrote my first Verilog on an Altera chip and I'll remember them fondly.
- greenavocado 2y ago[flagged]
- 9283409232 2y agoI don't think people are opposed to tariffs, at least they weren't before. Bernie Sanders has historically been for tariffs when used properly. Used properly being the important phrase. When you have someone who doesn't understand what a trade deficit is imposing tariffs based on the difference between deficit and surplus, you pretty effectively turn people against tariffs on top of the whole destroying the global economy thing.
- dingnuts 2y agoNo, the issue is not that Trump doesn't have the appropriate understanding. The issue is that they are illegal tariffs. The President does not have the power to create tariffs. Congress does! The reason the President doesn't have this power is because the economy should not rest on the whims or understanding of any one person.
- 9283409232 2y agoI mean there are several issues at play here. He is being sued for the illegal tariffs since Republicans are spineless and are cool with him just doing anything so I'm focusing on the practical problems.
- roughly 2y agoWithout arguing the merits of the Altera investment or divestment, a common pattern for Intel seems to be a wild see-sawing between an aggressive and a defensive market posture - it’s a regular occurrence for Intel to announce a bold new venture to try to claim some new territory, and just as regular that they announce they’re halting that venture in the name of “consolidating” and “focusing on their core.” The consequence is that they never give new ventures time to actually succeed, so they just bleed money creating things they murder in the cradle, and nobody born before last Tuesday is investing in bothering to learn the new Intel thing because its expected lifespan is shorter than the average Google product. Intel either needs to focus or they need to be bold (and I’d actually prefer they be bold - they’ve started down some cool paths over time), but what they really need is to make up their goddamn minds and stop panicking every other quarter that their “ten-year bets” from last quarter haven’t paid off yet.
- jrockway 2y agoThis seems to be common for corporate America in general. I used to work at a YC startup. We kiiiiiinda maaaaaaaybe ran out of money (not my department) and happened to get bought by a large investor that also happens to be a US-based hardware manufacturer. Two years and countless reorgs later, they laid everyone off and as far as I know, are no longer in the business of selling the software products they bought. They never figured out how software worked, never had anyone managining the division for more than 6 months, and got bored. I think they thought by moving everyone over to Microsoft Word and Windows laptops (peppered with a half-hearted threat about RTO), they would just magically make billions of dollars the first month. It didn't happen. I am beginning to think M&A are just some sort of ego thing for bored megacorp execs, rather than serious attempts to add efficiency and value to the marketplace. (Prove me wrong, bored megacorp execs. I'll wait.)
- aurumque 2y agoHaving been through a few acquisitions myself, I think there is a perverse incentive where buying and destroying any competition (real or imagined) leads to positive enough outcomes that it doesn't matter if the underlying asset is destroyed. Nobody would come out and say that, but when an acquisition is tossed aside there may not be enough repercussions to prevent it from happening again.
- matt3210 2y agoIntel's problem is that they're trying to deliver short term shareholder value instead of long term stable value.
- lvl155 2y agoNot farfetched to think they’re maybe 6-8 quarters away from imploding. They need to survive.
- DebtDeflation 2y agoThat's a fair assessment. If they're not shipping 18A in volume early next year they likely will end up getting parted out later next year.
- sambull 2y agoThey'll give any market a good 18 months and then dip
- Jach 2y agoMan I remember being excited when Intel bought Altera, maybe they'd bring FPGAs to the masses, then they proceeded to do nothing with them...
- jeffparsons 2y agoI was excited, too. I was also excited when Intel announced Larrabee. That was before I learnt about the many and varied ways in which Intel sabotages itself, and released that Intel's underperformance has little to do with a lack of good technical ideas or talent. I.e. I was young and naive. I am now considerably less young, and at least a little less naive.
- varispeed 2y agoSeems quite cheap. If I was a state I'd buy it. Possibly give stake to the suitable university and then create internships and other learning opportunities. I would also subsidise products to SMEs and then invest more to ensure company can supply defence and other industries, decoupling the country from dependence on other countries from crucial tech. I mean it's a pipe dream, but why not.
- fc417fc802 2y agoI think nationalization is usually frowned on in the west, but your comment about universities got me wondering. It seems small enough that the state could donate it to a consortium of research universities. That'd have to be better than PE in terms of serving the national interest, wouldn't it?
- bjourne 2y agoApparently, the FPGA industry wasn't large enough for two major players. Maintaining an extremely specialized developer ecosystem for a relatively small niche can't have been cheap. Almost zero cross-over too, since FPGA tooling is much too foreign to be repurposed for other architectures. I suspect this move will make it a bit harder for Intel to collect "developer mindshare" for their other hyped up stuff because no one likes having the rug pulled out from under them. Hope AMD can make a better job with Xilinx than what Intel could with Altera.
- rasz 2y agoIntel FPGA venture made tons more sense than AMD following it. FPGAs are great at filling up your idle fabs and honing engineering skills on reaching high yields. Selling now also makes sense. There was only one serious competitor in 2015. Now you got Tariffs both ways to the main place where everything is build, and said place has own homegrown vendors like GOWIN, Sipeed, Efinix. But the biggest reason is amount of stuff designed in the West/Taiwan is falling with China taking over actual product design. https://itif.org/publications/2024/08/19/how-innovative-is-china-in-semiconductors/ https://itif.org/publications/2024/08/19/how-innovative-is-c... >In 2015, China released its “Made in China 2025” (MIC 2025) strategy, which refined some of these targets, setting a goal of achieving 40 percent self-sufficiency in semiconductors by 2020 and 70 percent by 2025. https://en.wikipedia.org/wiki/Made_in_China_2025 https://en.wikipedia.org/wiki/Made_in_China_2025 >In 2024, the majority of MIC 2025's goals were considered to be achieved, despite U.S. efforts to curb the program. Products coming out of China no longer use STM microcontrollers, Vishay/Analog mosfets/diodes and Altera/Xilinx FPGAs. Its all Chinese semiconductor brands you never heard about. Good example is this teardown of Deye SUN-5K-SG04LP1 5kW hybrid solar inverter https://www.youtube.com/watch?v=n0_cTg36A2Q https://www.youtube.com/watch?v=n0_cTg36A2Q
- bjourne 2y agoIntel was looking to sell Altera for over a year before Trump's Tariff Tourettes. And I bet it wasn't the hardware that was the problem, it was the software. No matter how amazing your FPGA hardware is, it is useless if you can't also produce high-quality software for operating it. For CPUs you can just tell people to use gcc or clang, not so with FPGAs.
- Calwestjobs 2y agoAnyone who hoped Lunar Lake to buy Altera give thumbs up.
- mmmBacon 2y agoWhen Intel acquired Altera, Altera’s market share was at 36% and Xilinx at 51%. Today Xilinx remains at ~50% while Altera’s share has dropped to 29%. Altera has lost share to Microchip and Lattice. I’ve said it before, Intel is where technology companies go to die. Fortunately while Altera is probably a mess of useless Intel drone MBAs, there’s a decent core that can be salvaged. Best of luck to them.
- d-moon 2y agoAs someone who's worked at Xilinx before and after the merger, it's a surprise they were even able to sell it for that much. Altera has been noncompetitive to Xilinx in performance and to Lattice in terms of low-end/low-power offerings for at least the last 2 generations. I'm concerned about the future of FPGAs and wonder who will lead the way to fix these abhorrent toolchains these FPGA companies force upon developers.
- gscott 2y agoIt seems FPGA can now do things for LLM's so there might be some future in that https://www.achronix.com/blog/accelerating-llm-inferencing-fpgas https://www.achronix.com/blog/accelerating-llm-inferencing-f...
- throwaway48476 2y agoIts never going to be as efficient as ASIC and the LLM market is definitely big enough for ASICs to be viable.
- lesuorac 2y agoThis is past tense no? There's been neural processing chips since before LLM craze [1]. [1]: https://en.wikipedia.org/wiki/Neural_processing_unit#History https://en.wikipedia.org/wiki/Neural_processing_unit#History
- imtringued 2y agoI hear this a lot, but in my experience this isn't true at all. A Versal AI Edge FPGA has a theoretical performance of 0.7TFLOPs just from the DSPs alone, while consuming less power than a Raspberry Pi 5 and this is ignoring the AI Engines, which are exactly the ASICs that you are talking about. They are more power efficient than GPUs, because they don't need to pretend to run multiple threads each with their own register files or hide memory latency by swapping warps. Their 2D NOC plus cascaded connections allow them to have a really high internal memory bandwidth in-between the tiles at low power. What they are missing is processing in memory, specifically LPDDR-PIM for GEMV acceleration. The memory controllers simply can't deliver a memory bandwidth that is competitive with what Nvidia has and I'm talking about boards like Jetson Orin here.
- sandworm101 2y agoI cannot help myself. My brain parks "Altera" right beside the Weyland and Jupiter Mining corps. https://subnautica.fandom.com/wiki/Alterra_Corporation https://subnautica.fandom.com/wiki/Alterra_Corporation
- ACAVJW4H 2y agoQuick search shows Altera held 30% of the FPGA market. That puts AMD’s $50B acquisition of Xilinx (which holds ~50% of the market) in an awkward light. Using some extremely crude math, Xilinx’s fair market value might now be closer to ~$15B. Did AMD massively overpay, or has the FPGA market fundamentally shifted? Curious to see how this new benchmark ripples into AMD’s stock valuation.
- timewizard 2y agoThe FPGA market shifted. For a brief moment they were allowed to be on BOMs of end user devices due to the rest of the computing field lagging behind somewhat. That period, as far as I can tell, is over. My anecdotal example would be high end broadcast audio processors. These do quite a bit beyond the actual processing of audio, in particular, into baseband or even RF signal generation. In any case these devices used to be fully analog, then when they first went digital were a combination of DSPs for processing and FPGAs for signal output. Later generations dropped the DSP and did everything in larger FPGAs as the larger FPGAs became available. Later generations dropped the whole stack and just run on an 8 core Intel processor using real time linux and some specialized real time signal processing software with custom designed signal generators. The high core and high frequency CPUs became good enough and getting custom made chips became exceptionally cheap as well. FPGAs became rather pointless in this pipline. The US military, for a time, had a next generation radio specification that specifically called for the use of FPGAs, as that would allow them to make manufacturer agnostic radios and custom software for them. That never panned out but it shows the peak use of FPGAs to manage the constraints of this time period.
- fuzzythinker 2y agoNot all market share are equal, like iphone vs. android. Also, the value for the leader will cost more than the second in line.
- deleted 2y ago[deleted]
- unethical_ban 2y agoWas altera the thing they bought to do some really cool networking/switching/SDN stuff? Paging bcantrill.
- saagarjha 2y agoYou might be talking about Tofino?
- unethical_ban 2y agoThat's the one.
- wmf 2y agoYou're thinking of Barefoot which is also dead. (And Fulcrum before that.)
- MangoCoffee 2y agoWhat a waste! I can never understand corporate thinking and how CEOs get such massive fucking pay for decisions like this. Intel paid $16.7 billion in 2015 and sold it for $8.75 billion?! What about all the money dumped into Altera from 2015 to 2025? How much was that? Is Intel just handing over the FPGA market to AMD?
- petermcneeley 2y agoRight but they are only selling 51% of it. https://download.intel.com/newsroom/2021/archive/2015-12-28-press-kits-intel-acquisition-of-altera.pdf https://download.intel.com/newsroom/2021/archive/2015-12-28-...
- throwaway2037 2y ago> Is Intel just handing over the FPGA market to AMD? Maybe? But who cares. From all of the comments above, I learned that the FPGA market is stalled or shrinking. Even AMD likely overpaid for Xilinx.
- xyst 2y agoLeadership at Intel needs to go. They cannot be allowed to be C-level execs at any company. Selling out to PE is a signal this company is about to get gutted and loaded to the tits with debt and management fees from PE.
- bcrl 2y agoHas everyone already forgotten about Optane, too?
- dtquad 2y agoGPGPUs ended up becoming the AI/cloud accelerators that FPGAs promised to be back when Intel bought Altera. FPGAs are not ideal for raw parallel number crunching like in AI/LLMs. They are more appropriate for predictable real-time/ultra-low-latency parallel things like the the modulation and demodulation of signals in 5G base state stations.
- AlotOfReading 2y agoFPGAs might not be ideal, but AMD's NPU IP originated with Xilinx. Intel was an early player to so many massive industries (e.g. XScale, GPGPU, hybrid FPGA SoCs). Intel abandoned all of them prematurely and has been left playing catch-up every time. We might be having a very different discussion if literally any of them had succeeded.
- coredog64 2y agoXScale was forced on Intel as a penalty for anticompetitive activities against Digital. It’s no surprise then that they weren’t interested in doing anything with it.
- TheMagicHorsey 2y agoI used to work at Intel (around 1999) in their Jones Farm campus in Oregon. My employee stock grants from that time are still underwater. This was the heyday at Intel. I left within a year because I noticed that the talent that was respected, compensated and influential at Intel was the sales engineers. I can't pretend to have known that would lead to the decline of the company, but I knew that as an engineer uninterested in sales, that it wasn't the place for me.
- ChrisGammell 2y agoI'd love to hear more about how the "sales engineers were the influential ones" manifested. I have an idea in my head, but I'm curious about details.
- TheMagicHorsey 2y agoThe sales engineers had a special rotaion program so they could work in different parts of the business and get experience in different areas, and they had special social events, dinners, etc. Their starting salaries were like 25% - 50% higher than regular engineers' salaries. The rest of us peasant engineers just wrote code.
- skeptrune 2y agoWhat would sales engineers be responsible for at a company like intel? I thought that was more of a SaaS thing.
- TheMagicHorsey 2y agoThey were trained to handle the relationships with the companies writing software for x86 and the companies building computers with Intel chips.
- flanfly 2y agoProps to Intel duping AMD to buy Xillix for whooping $50B
- Panzer04 2y agoAMD bought an overpriced company with their own overpriced stock. Probably not as bad as it might look.
- deleted 2y ago[deleted]
- dboreham 2y agoI left the hardware business in 1992 but seems that nothing has changed. People still think FPGAs are really cool and nobody cab figure out how to make money selling them.
- graymatters 2y agoThe business geniuses of intel bought Altera for nearly $17B in 2015. Now sold control at valuation barely half of that. After official inflation of over 30% during that time. Which means it lost over 2/3 of its value, (take into account also the lost interest on that money). Given that they gave up control for half the money, it’s effectively as if it was relinquished for 1/3 of what Intel paid for it. So far - no one of the responsible Intel execs paid any price for such atrocious loss of stakeholders’ value. They need to be in jail and lose their personal wealth to repay the stockholders. The SEC should investigate them, see whether there was any inside trading to benefit from this horrible value loss. This criminal lack of performance needs to be brought up during the upcoming shareholders meeting. Responsible must pay the price. Would you hire again the Intel CEOs, head of Intel Capital, any members of Intel’s board of directors after such abysmal performance?
- ein0p 2y agoThat whole acquisition always was a head-scratcher to me. OK, you pay nearly 17B for the thing, and then do absolutely nothing with it. How does that work? Even during its best years 17B was big money for Intel.
- tim333 2y agoSummary of the situation from The Register headline: >Intel flogs off majority stake in Altera to private equity for $4B >Buy high, sell low: FPGA biz cost x86 giant $16B decade ago for those not up on this stuff
- KoolKat23 2y agoLooks like Intel is being stripped for parts.
- deleted 2y ago[deleted]
- philipov 2y agoI'm not surprised by this divestiture - Investor confidence in Alterra has been low ever since the disastrous loss of their brand new capital ship Aurora on its very first mission.
- BobbyTables2 2y agoBravo, they managed to break even on their decade-old investment. Should have stuffed it under the bed instead…