By Agrim Agrawal
New York: Chipmaker Altera has confidentially filed for a US initial public offering that could raise more than $2 billion, adding to a busy year for technology listings and giving investors another company to watch in the semiconductor space.
Altera makes programmable chips for data centres, telecom networks, industrial equipment, AI systems, and aerospace and defence applications. It is backed by Intel and private equity firm Silver Lake.
The company has already had an unusual journey to the stock market. Intel bought Altera for about $16.7 billion in 2015. Last year, Silver Lake acquired a 51% stake for $4.46 billion, valuing the company at $8.75 billion. Intel held on to the other 49%. Altera is now looking to make its way back to the stock market as a standalone company.
There is still no clear figure for how much Altera plans to raise or what the company could be valued at. Altera has filed confidentially, so investors will have to wait for more details before they can properly judge the company. If it raises more than $2 billion, however, the offering would be among the larger semiconductor IPOs in recent years.
The timing is also interesting. US companies have raised more than $145 billion through IPOs this year, according to Renaissance Capital data cited by Reuters. A number of big technology and AI-linked listings have also brought fresh attention to a market that had been fairly slow in recent years.
AI is another reason the Altera listing is likely to attract attention. But the company does not directly compete with Nvidia in making the main AI chips used for computing. Its programmable chips can instead work alongside GPUs in data centres, handling tasks such as networking, data processing and some AI inference.
That puts Altera somewhere in the larger infrastructure behind the AI boom. We mostly see the finished products, whether that is a chatbot or an AI-powered app. Behind them are data centres, processors, networking equipment and a long list of companies supplying the hardware.
For Altera, the IPO is also a test of whether investors still want to invest in that infrastructure. CEO Raghib Hussain told Reuters in July that the company expected revenue growth in the mid-20% range this year.
The company will also be competing for attention in a semiconductor market that has already seen some huge listings. South Korean chipmaker SK Hynix raised more than $26 billion from its US listing in July.
The question now is whether this interest in technology IPOs will continue. Semiconductor companies have gained from the money flowing into AI infrastructure. However, if that investment were to slow down, investors may start to reconsider whether these companies are actually something of substance ot it is all a farce.
For now, Altera’s filing is another sign that the US IPO market is opening up again. For a company that moved from Intel ownership to private equity and is now heading back towards public markets, the listing will also offer investors a closer look at how much value there is in the less visible hardware supporting the AI boom.
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