Altera sees growth driven by AI, robotics demand, CEO says

Created at 10 Jul · 6:44 PM1 source↑ Market-relevant

IN SHORT

Altera, an Intel spin-off, is experiencing significant growth, with its CEO Raghib Hussain projecting annual revenue increases of around 20% and a doubling of operating income. This resurgence is attributed to increased demand for its field-programmable gate array (FPGA) chips in artificial intelligence and robotics applications.

Key Numbers

20%annual growth rate

mid-20%expected growth this year

$4.46 billionSilver Lake stake purchase price

$8.75 billionAltera valuation at Silver Lake transaction

$1.5 billionAltera revenue in 2024

$2.9 billionAltera revenue in 2023

$100 to several hundred dollarsprojected FPGA content per robot

100 billion to several hundred billion dprojected market value for FPGAs in robotics over a decade

sixnew chip prototypes produced last year

15remaining transition service agreements from Intel

Who's Involved

Altera

maker of programmable chips spun out of Intel

Raghib Hussain

CEO of Altera, formerly of Marvell Technology

Intel

semiconductor company, former owner of Altera

Silver Lake

private equity firm that acquired a majority stake in Altera

AMD

competitor to Altera, owner of Xilinx

Xilinx

AMD-owned competitor in FPGAs

TSMC

chip manufacturer for Altera

Altera sees growth driven by AI, robotics demand, CEO says

↳ Why This Matters

Altera's return to growth signals a potential shift in the FPGA market, with AI and robotics driving demand for specialized chips. This positions Altera as a key player in enabling advanced computing applications and could impact the competitive landscape for semiconductor manufacturers.

Key facts

Altera, spun out of Intel, is experiencing approximately 20% annual growth and more than doubling operating income.
The company expects mid-20% growth this year, driven by demand in AI and robotics.
Altera's revenue was $1.5 billion in 2024, down from $2.9 billion in 2023, due to a market shift towards GPUs and competition from AMD-owned Xilinx.
CEO Raghib Hussain described FPGAs as the 'nervous system' to GPUs' 'brain' in AI and robotics applications.
Altera is the sole programmable chip supplier in full production with DDR5 memory for its chips.
The company manufactures chips using both Intel Foundry and TSMC technologies.

Altera, a programmable chip manufacturer that was formerly part of Intel, is experiencing a resurgence in growth, with CEO Raghib Hussain projecting annual revenue increases of approximately 20% and a doubling of operating income. This growth is fueled by increasing demand for its field-programmable gate array (FPGA) chips in artificial intelligence and robotics applications.

Hussain stated that the company grew more than 20% last year and anticipates similar growth this year. He emphasized Altera's strategy of bringing engineering teams closer to customers to enhance engagement and product development.

Despite a reported revenue decline from $2.9 billion in 2023 to $1.5 billion in 2024, a shift in the market towards GPU chips for AI and increased competition from AMD-owned Xilinx contributed to the previous year's dip. Hussain is now positioning Altera to capitalize on the AI and robotics boom, where its FPGAs will serve as crucial components for connectivity, data pre-processing, and sensor fusion, complementing GPUs.

He likened FPGAs to the 'nervous system' supporting the 'brain' of GPUs in these advanced applications, projecting a significant market opportunity worth hundreds of billions of dollars over the next decade. Altera has also focused on operational improvements, including the development of six new chip prototypes last year and a substantial reduction in its reliance on Intel's transition service agreements. The company is also highlighted as the sole programmable chip supplier currently in full production with DDR5 memory, and it manufactures its chips using both Intel Foundry and TSMC's advanced technologies.

Frequently asked questions

FPGAs, or field-programmable gate arrays, are integrated circuits that can be programmed after manufacturing. In AI and robotics, they are used for tasks like connectivity, data pre-processing, and sensor fusion, working alongside GPUs.

Altera reported $1.5 billion in revenue for 2024, a decrease from $2.9 billion in 2023. However, the company is now experiencing approximately 20% annual growth and expects mid-20% growth this year.

Altera's largest competitor in the FPGA market is Xilinx, which is owned by AMD.

Altera manufactures its chips using both Intel Foundry and Taiwan Semiconductor Manufacturing Co. (TSMC), and is developing products on TSMC's advanced 2nm and 3nm technologies.

What Happens Next

01Altera is preparing for an eventual public listing.

02The company is developing products on TSMC's 2-nanometer and 3-nanometer technologies.

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How It Developed

Altera became fully independent in September after Intel sold a 51% stake to Silver Lake for $4.46 billion.

CEO Raghib Hussain stated the company grew over 20% last year and expects mid-20% growth this year.

Hussain highlighted Altera's strategy to bring engineering closer to customers for improved engagement.

Intel reported Altera revenue of $1.5 billion in 2024, a decrease from $2.9 billion in 2023, due to a shift towards GPU chips for AI and market share loss to AMD-owned Xilinx.

Hussain is positioning Altera for growth in AI and robotics, utilizing FPGAs for connectivity, data pre-processing, and sensor fusion alongside GPUs.

Hussain projected FPGA content per robot could create a market worth hundreds of billions of dollars over a decade.

Altera produced prototypes of six new chips last year and reduced its dependence on Intel's transition service agreements.

Altera is the only programmable chip supplier in full production with DDR5 memory for mid- to high-programmable chips.

Sources

Altera returns to growth as AI, robotics fuel demand, CEO saysReuters