Intel To Sell Altera Stake For 4.5-billion

Mondays deal values Altera at just 8.75-billion compared to the nearly 17-billion Intel paid in 2015, but the sale will provide the company much-needed cash after hefty bets on contract manufacturing by former CEO Pat Gelsinger strained its finances.

Shedding assets, including Intels stake in Altera, is at the centre of Tans strategy to streamline the chip maker after predecessors failed to diversify beyond its mainstay PC and server chip business for years.

The leadership missteps have left Intel struggling to gain a footing in the AI industry dominated by Nvidia, while rival AMD threatens its stronghold of the CPU market.

Todays announcement reflects our commitment to sharpening our focus, lowering our expense structure and strengthening our balance sheet, said Tan, who took the helm after Gelsingers ouster in December. Intel shares were up 2.8 in afternoon trading.

Since last year, Intel has taken steps to spin out Altera, which makes programmable chips that can be used for various purposes in industries ranging from telecommunications to the military.