Intel does another U-turn, looking to sell a part of its chip subsidiary that it called 'core part of its future'

Intel is exploring stake sale in Altera , its programmable chip subsidiary . The chipmaker is aiming to sell a minority stake in Altera, sources familiar with the matter told CNBC. Quoting people with knowledge of the matter, the report said that Intel is seeking a deal that values Altera at around $17 billion.

Intel has reportedly approached potential investors, including private equity firms, about acquiring a significant portion of the business, with the possibility of selling a majority stake.

This move represents a dramatic shift for Intel, which acquired Altera for $16.7 billion in 2015. It comes as the company faces significant financial pressures , with its stock price down 50% this year amid fierce competition from rivals like Nvidia and Advanced Micro Devices .

The potential sale would mark a departure from Intel's previous stance on Altera. As recently as last month, CEO Pat Gelsinger had described the business as core to Intel's future. The company had earlier suggested it might monetize Altera through an IPO by 2026, but the current sale process indicates a more urgent need for capital.

Intel's decision is part of a broader restructuring effort, which includes spinning off its foundry business as an independent subsidiary. The company reported a $1.6 billion loss in the first quarter of 2024 and announced 15,000 job cuts in August, underscoring its financial challenges.

Despite these difficulties, Intel has secured a significant win for its newly independent foundry business, announcing a multibillion-dollar agreement with Amazon Web Services to produce an "artificial intelligence fabric chip" using its advanced 18A manufacturing process.

The restructuring also involves pausing construction of new chip plants in Europe and reducing Intel's global real estate footprint. Bloomberg reports that CEO Gelsinger described these changes as "the most significant transformation of Intel in over four decades."

Intel's strategic shifts have attracted attention from industry rivals. Arm reportedly approached Intel about acquiring its product division but was rebuffed, while Qualcomm has expressed interest in a potential takeover of Intel.