Without 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 mu---r 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 godda-n minds and stop panicking every other quarter that their “ten-year bets” from last quarter haven’t paid off yet.
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Ouuff... body blow.
How many DEI's does it take to change a light blub?
@cc now do the 10 year return on investment.
Don’t forget to include the billions put into the business over that lifetime.
10 years is a long time.
You should expect a non-negative return over that timeframe. I’ll save you the research - it’s a horribly bad investment.
Sandra is out, guys. Raghib Hussain (from Marvell) is the new CEO.
@cb+1j I'm not going to bother to look, but Altera made money in most of the years since it was bought, and I've read that the FPGA market is soft at the moment so not a great time to divest.
When a company is acquired, the buyer pays a multiple of existing sales, so they are paying for some amount of future cash flow and that usually means they don't get to breakeven for a few years.
So to state that the company lost 50% on the investment is misleading.
They got cash flow over the years and only sold 51%, so will get cash flow in future years as well.
Intel's acquisition of Altera in 2015 was valued at $16.7 billion. The deal with Silver Lake values the FPGA company at just $8.75 billion. A major haircut certainly makes sense. Altera generated revenue of $1.54 billion and adjusted operating income of just $35 million in 2024. That compares to revenue of $1.93 billion and operating income of $543 million in 2014 .
Genius level management at work here.
All tech companies operate like this. Intel has so far made a lot of poor choices but that can change.
I liked Altera and don't think the purchase was particularly wrong (AMD bought Xilinx) but the company forcing them on lagging nodes was a mistake.
I'd imagine they will have more freedom going forward to use whichever supplier they choose.
Even better, serial-business-unit-failure Sandra is out.
You can say that about pretty much any acquisition other than Altera. It didn't make any sense when Intel bought it, but after that, Intel tried to make it successful. There isn't enough market to justify what Intel paid for it, period. It was a bad idea initially and Intel managed to get out of it somehow.
Never give new ventures time?
Altera was bought almost 10 YEARS ago!
How much time did they need?
They tried to force them onto Intel’s process nodes and failed miserably all but ceding the market to Xilinx with their dvmb strategy.
Intel has no brain. Thinks it is the market and do not understand where the market is going.
Every company that intel acquires is destroyed. It's the kiss of death.