Intel has announced plans to treat its programmable chip unit, the Programmable Solutions Group (PSG), as a standalone business with the intention of spinning it out through an initial public offering (IPO) in the next two to three years. This move is part of Intel’s strategy to control costs and focus on its foundry business and core processors. Intel’s stock price rose 2.3% in extended trading after the announcement.
Under this plan, PSG will have its own balance sheet as it moves towards independence. Intel will continue to support the business, retain a majority stake, and may seek private investment. Sandra Rivera, who leads Intel’s broader Data Center and AI group, will become the CEO of PSG. Intel will continue to manufacture the group’s chips.
This strategic move follows Intel’s spinoff of Mobileye, its self-driving subsidiary, last year. The strategy, under CEO Patrick Gelsinger, aims to catch up with Taiwan Semiconductor Manufacturing Co. in manufacturing by 2026. Intel acquired the FPGA business when it purchased Altera for $16.7 billion in 2015.
The announcement reflects the strong demand in the semiconductor industry for field programmable gate arrays (FPGAs). FPGAs are simpler than powerful processors but are more flexible, respond faster, and can be more power-efficient. They are often used in data centers, telecommunications, video encoding, aviation, and other industries. Intel’s FPGAs, sold under the Agilex brand, have experienced growth, with PSG reporting three record quarters in a row, offsetting a slump in server chip sales within Intel’s Data Center and AI group.
