Intel is seeking an investor for a stake in its Altera chip unit, CNBC reports

• Intel is looking for an investor to acquire a stake in its Altera subsidiary, CNBC reported.
• The US tech giant is seeking a deal that values the programmable chip unit at around $17 billion.
• Intel is facing challenges in its business at a time when the US is seeking to revitalize its chip industry.

Tech giant Intel is seeking an investor for a stake in its Altera subsidiary, CNBC reported late Thursday, citing people familiar with the matter.

Intel is seeking a deal that values Altera at around $17 billion, per CNBC. The US company is looking to raise several billion dollars for at least a minority stake in Altera, according to the network.

Intel has told some investors this week that it would be possible to acquire a majority stake in Altera, according to CNBC.

The news comes as US chip giant Intel faces troubles just as Washington is seeking to revitalize the country’s chip industry for national security reasons.

In March, President Joe Biden announced Intel would receive $8.5 billion in funding from the CHIPS Act. In September, Biden awarded another $3 billion to the company.

However, Intel still faces business challenges that include manufacturing delays and falling behind in the AI race. The company’s stock price is down 55% this year to date.

The Wall Street Journal reported in September that its competitor Qualcomm had approached Intel about a takeover deal.

Last month, Intel CEO Pat Gelsinger mentioned in a message to employees that the company was looking to sell part of its stake in Altera to “carefully manage our cash as we meaningfully improve our balance sheet and liquidity.”

The sale of part of Intel’s stake in Altera “has long been part of our strategy to generate proceeds for Intel on Altera’s path to an IPO,” Gelsinger said in his message.

Intel’s search for an investor in Altera comes in a big week for semiconductor companies. Dutch equipment maker ASML and Taiwanese chip giant TSMC both reported quarterly earnings that showed AI chip growth in the short to medium term.

Intel did not immediately respond to a request for comment from Business Insider sent outside regular business hours.