Intel Corp (NASDAQ:INTC, ETR:INL) is reportedly considering the sale of programmable chip unit Altera which would have a significant impact on the company’s value, analysts at Wedbush believe.
Reuters reported on Monday that Intel is considering actions to shore up its finances, including slowing investments and selling non-core assets such as Altera in lieu of earlier plans to IPO the field programmable gate arrays (FPGAs) business.
“Intel already planned to IPO Altera. As such, a sale would ostensibly yield more cash to Intel sooner, albeit while in our view not significantly shifting Intel’s plans,” the Wedbush analysts wrote in a note to clients.
“Depending on how much cash Intel could generate via a sale, the divestment of Altera could have meaningful implications for Intel’s value. Remember Intel purchased Altera for about $17 billion or nearly 20% of its current market cap.”
Potential buyers of Altera include AMD and Marvell, with the analysts seeing AMD as an unlikely buyer in light of the FPGA market share that would be controlled by a Xilinx/Altera combination. They believe Marvell would “make much, much more sense,” noting end market synergies.
Meanwhile, on Tuesday, it was reported that Intel faces being removed from the Dow Jones Industrial Average due to a slump in its share price.
An almost 60% drop in Intel this year has made it the worst performer in the index.
Intel’s shares were down 8.5% at about $20 on Tuesday afternoon amid a broader tech sector selloff.
Also on Tuesday, Intel launched its latest x86 processors, the Intel Core Ultra 200V series processors.
The Core Ultra 200V series features Intel's new Xe2 graphics architecture, enhanced security, and optimized power management, offering up to 50% lower power consumption and up to 120 TOPS (tera operations per second) across CPU, GPU, and NPU.
With broad support from major laptop manufacturers, these processors are set to power over 80 consumer designs, with availability starting September 24.