Intel considers selling Altera, with Marvell (Marvell.US) seen as a potential buyer
Intel is considering selling its programmable chip division Altera as part of cost-cutting measures, with Marvell seen as a potential buyer. Analysts point out that this deal will help Marvell diversify its market and enhance its presence in telecommunications and data centers. Altera is valued between $18 billion and $22 billion, with projected revenue of $2.9 billion in 2023, expected to decline in 2024. While Intel may face capital gains tax, a direct sale will strengthen its balance sheet
According to the financial news app Zhitong Finance, as part of a broader cost-cutting plan, Intel (INTC.US) is exploring the possibility of selling its programmable chip division Altera, with Marvell (MRVL.US) being seen as a potential buyer. Analysts at Raymond James pointed out in an industry briefing that such a deal could bring appropriate benefits to Marvell.
Lead by Srini Pajjuri, analysts at Raymond James stated, "From a strategic perspective, the potential acquisition would help Marvell diversify into industrial or defense markets and strengthen its strong presence in the telecommunications and data center markets." "The higher profit margins associated with FPGA products are also attractive to Marvell, especially as custom AI chips become a larger part of its revenue."
Raymond James estimates that Altera's current market value is between $18 billion and $22 billion. In 2015, Intel acquired Altera for $16.7 billion. In 2023, Altera's revenue was $2.9 billion, but it dropped by about $700 million in the first half of 2024. The analysts at Raymond James predict that by 2025, Altera's total revenue will reach $1.9 billion.
Pajjuri stated, "Although Intel may need to pay some capital gains tax, a direct sale appears feasible and should significantly strengthen Intel's balance sheet."
For Marvell, such a deal would result in "neutral or slight growth in earnings" and provide "moderate synergies."