Intel, on Monday, announced its agreement to sell 51% of its Altera semiconductor division to Silver Lake, a private equity group.

Intel said in a press statement that the agreement, which appraises Altera at $8.75 billion, would render the division “operationally independent.”

The chip manufacturer will maintain a 49% ownership in Altera, which will be directed by Raghib Hussain, who is poised to replace Sandra Rivera as CEO on May 5.

“The announcement today demonstrates our dedication to enhancing our focus, reducing our cost structure, and fortifying our balance sheet,” said Intel CEO Lip-Bu Tan.

“Altera is advancing in realigning its product portfolio to engage in the most rapidly expanding and lucrative segments of the FPGA market.”

Altera was established in 1983 by semiconductor experts Rodney Smith, Robert Hartmann, James Sansbury, and Paul Newhagen.

The firm manufactures a variety of programmable chips referred to as field-programmable gate arrays (FPGAs) together with the corresponding software for their support. Its chips are used in sectors such as telecommunication, robotics, and artificial intelligence.

In 2015, Intel purchased Altera for $16.7 billion and established a business unit named Programmable Solutions Group (PSG).

In 2023, Intel announced its plan to divest PSG into an independent entity while retaining controlling ownership, with the intention of pursuing an IPO within three years.

The decision to separate PSG occurred at a period of significant expansion in the FPGA industry.

One research indicates that the FPGA industry may expand from $12.1 billion last year to $25.8 billion by 2029.

In fiscal year 2024, Altera reported sales of $1.54 billion. The merger with Silver Lake is anticipated to conclude in the latter part of 2025.