Altera stock fell about 10 percent in pre-market trading. When news of the talks first broke in March, Altera stock posted a 28 percent jump.
The two companies have not spoken in more than a week, sources said, as neither party could agree on a price.
Those sources said Intel's offer was in the neighborhood of the low $50-range per share, and that the talks had taken place over several months.
For its part, Intel stock traded down more than 2 percent in the pre-market trade.
Another semiconductor company, , saw about a 3 percent pre-market gain—potentially on speculation that it could be the next takeover target for Intel.
—CNBC's David Faber contributed to this report.