Tech giant Intel has agreed to sell 51% of its programmable chips unit, Altera, to technology investment firm Silver Lake.

This transaction values Altera at $8.75bn, with Intel retaining a 49% ownership stake in the unit.

In March 2024, Intel launched Altera as its stand-alone field-programmable gate array (FPGA) company.

Altera provides programmable solutions for industrial, communications, data centre, military, aerospace, and government sectors, as well as emerging markets like AI/edge and robotics.

Its portfolio includes semiconductor solutions, software, and development tools that enhance customer technology innovation.

Intel CEO Lip-Bu Tan said: “Altera continues to make progress repositioning its product portfolio to participate in the fastest growing and most profitable segments of the FPGA market.

“We look forward to partnering with Silver Lake upon closing of the transaction, as their industry expertise will help to accelerate Altera’s efforts and unlock additional economic value for Intel.”

Intel will receive approximately $3.4bn in cash from Silver Lake as part of the deal, according to Bloomberg.

A consortium of banks, including Barclays, Bank of Montreal, Citigroup, Deutsche Bank, KKR Capital Markets and Royal Bank of Canada, is providing Silver Lake with $2bn in debt for the acquisition, the publication said citing sources.

Subject to customary closing conditions, the deal is anticipated to conclude in the second half of 2025.

In conjunction with the deal, Intel announced that Raghib Hussain will succeed Sandra Rivera as CEO of Altera, effective 5 May 2025.

Hussain joins Altera from Marvell, where he served as president of Products and Technologies.

Silver Lake chairman and managing partner Kenneth Hao said: “This investment represents a once-in-a-generation opportunity to invest in a scale leader in advanced semiconductors. Together with Raghib, we will be focused on strengthening Altera’s technology leadership position and investing in emerging AI-driven markets such as edge computing and robotics.

“We look forward to working closely with Intel as a strategic partner who will continue to provide US-based foundry services and complementary engagement with customers.”