Intel sells 51% stake in Altera to private equity firm on a $8.75B valuation

Original Article ↗ Hacker News Discussion ↗

Acquisition, Sale, and Financial Outcome

  • Intel bought Altera in 2015 for ~$16.7B and is now selling 51% at an $8.75B valuation, implying a roughly 50–60% real loss over a decade.
  • Multiple commenters see this as a textbook “buy high, sell low” failure and emblematic of poor capital allocation; some argue executives face no real consequences.
  • Others note Intel retains 49%, so it’s not a full exit, and speculate (without consensus) that Intel may have extracted what it wanted and is offloading the rest.

Original Thesis vs. Reality for FPGAs

  • The original dream: tightly integrated FPGA+CPU hybrid parts, and cloud/datacenter FPGA accelerators.
  • Enthusiasts liked the idea of x86+FPGA as a higher-end alternative to ARM+FPGA SoCs like Xilinx Zynq, but note that most Zynq-type applications (e.g., radio systems) have SWaP constraints that preclude big x86 CPUs.
  • Several posters say Intel never really “put it everywhere” or invested at Nvidia/CUDA scale (tooling, education, cheap access), so the ecosystem never took off.

Why the Datacenter / Mass-Market FPGA Story Stalled

  • FPGAs are powerful but niche: great for ultra-low-latency, bit-level, or short-life, low-volume products (medical, military, test gear, some HFT, telecom), not broad datacenter compute.
  • Barriers cited:
    • Much slower clocks than CPUs, and often worse FLOPs/memory-bandwidth ratios than GPUs/ASICs.
    • Painful, slow, non-portable development; skills don’t transfer easily from software.
    • Proprietary, dated toolchains with no GCC/LLVM-equivalent; cloud FPGA use is expensive.
    • Hard multi-tenant/safety model in the cloud (potential for pathological bitstreams, thermal hotspots, abuse).
  • Net effect: GPUs and custom ASICs became the accelerators FPGAs were supposed to be.

Tooling and Ecosystem

  • Multiple comments blame toolchains as the single biggest drag on FPGA adoption.
  • Intel did try some things (oneAPI FPGA backend, OpenCL-based flows), but they didn’t reach critical mass.
  • Open-source tools (Yosys, nextpnr) are seen as promising but still limited in chip coverage and not yet fully competitive.

FPGA Market Structure and AMD/Xilinx Comparison

  • Historically, Xilinx held ~50% share and Altera ~36%; commenters say Altera has since declined while Xilinx held roughly steady and lost some share to Microchip and Lattice.
  • Some view the FPGA market as stagnant or niche rather than high-growth; others say it is growing modestly, especially on the low end, but nowhere near AI-level growth.
  • AMD’s $50B Xilinx deal is debated: some think AMD overpaid given Altera’s new valuation; others argue not all market share is equal and Xilinx, as leader, commands a premium.

Intel’s Strategic Pattern and Culture

  • Frequent theme: Intel repeatedly launches bold initiatives (FPGAs, Optane, GPGPU/Larrabee, drones, networking silicon) then kills or unwinds them before they mature.
  • This creates a “why bother learning the new Intel thing” reputation and erodes developer and partner trust.
  • Commenters describe internal issues: short-term shareholder focus, rapid strategy flip-flops, heavy middle management, nepotism, and poor software culture outside a few core areas.
  • Some argue Intel sabotaged Altera by forcing migration to troubled Intel process nodes and internal design flows.

Private Equity and Alternatives

  • Many are pessimistic about private equity ownership, predicting cost-cutting, financial engineering, and long-term weakening of the business.
  • Others point out that PE sometimes does increase value and list examples from other industries, though labor and quality issues are flagged.
  • A few suggest it would be better for national or university consortia to own such strategic tech than PE, but acknowledge this is politically unlikely.

Implications for Intel’s Future

  • Several commenters see this as Intel raising cash and “stripping for parts” ahead of a crunch; some say Intel is only a few bad quarters away from serious trouble.
  • There is speculation about further sell-offs (e.g., Mobileye) and debate over whether Intel might eventually spin off or sell fabs, paralleling AMD’s GlobalFoundries move.
  • Many emphasize that Intel must focus on getting its 18A process into high-volume production; otherwise, more radical restructuring or breakup is expected.