Change in Intel’s Portfolio

A majority 51% stake in Altera, which specializes in programmable chips, will be sold to investment firm Silver Lake for over $4.4 billion. The transaction is expected to close in the second half of this year. Intel will retain a 49% stake and receive over $3 billion in cash from the deal. The financial return is significantly lower than the nearly $17 billion Intel originally paid for Altera a decade ago. The American manufacturer had already been planning this move since last year, when companies like Lattice Semiconductor expressed interest. In the end, Silver Lake emerged as the winner. The firm already holds a number of high-profile names in its portfolio[1], including semiconductor giant Broadcom, Dell, and Airbnb. According to Kenneth Kao, chairman of Silver Lake, the acquisition represents a once-in-a-generation opportunity. Bloomberg reports that Altera will now focus on emerging AI markets such as edge computing and robotics.[2]

A Change in Direction Under Tan’s Leadership

This is an important strategic move by CEO Lip-Bu Tan, who, according to Bloomberg, announced plans to shed non-core assets and focus on key areas of the business, including the development of new products like Panther Lake chips and adapting to customer demands. Altera, whose revenue last year amounted to $1.54 billion, just 3% of Intel’s total revenue, was also unprofitable, posting an operating loss of $615 million. Tan, who took over as Intel’s CEO in mid-March, is aiming to restore the company’s status as a major player in the tech industry. His vision has gained market support, although some analysts, according to Reuters, believe that given the market downturn, the timing of the Altera sale may not have been ideal.[3]

Declining Revenues and Stock Performance

Intel’s prolonged struggles are evident in its financial results, which have shown a downward trend since 2021. Last year, the company reported full-year revenues of $53.1 billion with an operating loss of nearly $19 billion. On a quarterly basis, revenues in the fourth quarter of 2024 reached $14.3 billion, marking a year-over-year decline of 7%, accompanied by an operating loss of $126 million. In January, the company projected a further drop in revenue for the second quarter, estimating between $11.7 and $12.7 billion.[1] [4]

This long-term unfavorable situation has also been reflected in Intel’s stock performance on the Nasdaq. As of April 15, 2025, the stock price stood at $20.31 — a level last seen in 2012. Although the stock saw a short-term boost in mid-February and March, its value has fallen by 40% over the past year and by as much as 67% over the past five years.*

Intel’s Stock Performance Over the Last 5 Years (Source: Investing.com)*

Caught Between Two Superpowers

Like the rest of the tech world, Intel is also facing challenges due to the trade war between the US and China. In addition to Donald Trump’s decision to raise tariffs on Chinese imports to the US by 145%, tariffs on semiconductors are also likely to become a reality soon. The situation is escalating from the side of Beijing, which, according to Al-Jazeera, will “fight until the end,” having raised its own reciprocal tariffs on American products to 125%.[5] The issue in this case is a rule from the China Semiconductor Industry Association, which could exempt companies from tariffs depending on where their products are manufactured. For example, AMD chips are made by Taiwan's TSMC, meaning they would be exempt from tariffs, whereas Intel, Texas Instruments, and others have manufacturing plants in the US.[6]

The CEO’s Investment Background

In the current climate, Intel CEO Lip-Bu Tan’s ties to Chinese companies are raising some eyebrows. In addition to holding controlling positions in over 40 firms and funds, he has, through his own investment vehicles, backed hundreds of companies — some of which have reported links to the Chinese government and military. According to Reuters, Tan has divested from several holdings, though without providing specific details. Intel has remained tight-lipped about the situation. A company spokesperson told the agency that Tan has completed all necessary disclosures regarding potential conflicts of interest, and any issues are being addressed in accordance with U.S. Securities and Exchange Commission (SEC) regulations. This revelation has divided market opinion. Some argue that Tan’s connections might ultimately benefit Intel, others are more sceptical, criticizing the optics of such ties. Legally speaking, U.S. citizens are not prohibited from investing in Chinese companies — even those with ties to the military — unless they appear on the Treasury Department’s Military-Industrial Complex list.[7]

Conclusion

The sale of a majority stake in Altera is just one of Tan’s first steps, and his plan to refocus Intel on key strategic areas comes at a crucial moment — especially as the company navigates significant challenges. The question remains whether Intel can successfully tackle not only technological hurdles but also growing geopolitical pressures. The company’s future will largely depend on how effectively it manages this transformation and adapts to a rapidly shifting tech and political landscape. For investors who believe in Intel’s long-term growth, the current low valuation may present an attractive entry point.

* Past performance is not indicative of future results.

[1] Forward-looking statements are based on assumptions and current expectations, which may prove inaccurate or change with evolving economic conditions. These statements are not guarantees of future performance and involve risks and uncertainties that are difficult to predict. Actual outcomes may differ materially from those expressed or implied.

[1] https://www.silverlake.com/portfolio/

[2] https://finance.yahoo.com/news/intel-close-unveiling-deal-sell-093744729.html

[3] https://www.investing.com/news/stock-market-news/intel-to-sell-51-stake-in-altera-to-silver-lake-3983582

[4] https://d1io3yog0oux5.cloudfront.net/_97c66ab89568cae91707ee257a2e743f/intel/db/887/9101/earnings_release/Q4%2724_EarningsRelease+%282%29.pdf

[5] https://www.aljazeera.com/economy/2025/4/15/trump-moves-to-put-tariffs-on-chips-and-drugs-floats-pause-on-auto-duties

[6] https://www.investing.com/news/stock-market-news/us-semiconductor-manufacturer-stocks-fall-on-china-tariff-concerns-93CH-3981494

[7] https://www.investing.com/news/stock-market-news/intel-ceo-invested-in-hundreds-of-chinese-companies-some-with-military-ties-3978618