Intel indicated that the Programmable Solutions Group will operate as its own entity, aiming to have an initial public offering in the timeframe of two to three years. Furthermore, Intel pledged to remain its primary benefactor, holding the majority stake, which corresponded with a 2.3% increase in share prices during after-hours trading.
Intel revealed plans to treat its Programmable Solutions Group (PSG) as an independent business, with the intent of spinning it out through an Initial Public Offering (IPO) within two to three years. Shares of Intel rose 2.3% following the announcement. The chipmaker will provide financial backing and maintain a majority stake in PSG, as well as consider private investment. In addition, Sandra Rivera will serve as CEO of PSG, and Intel will continue to manufacture the group's chips.
The decision follows Intel's spinoff of its self-driving unit, Mobileye, last year, and complements CEO Patrick Gelsinger's strategy to reduce costs and prioritize the manufacture of foundry products and its core processors so Intel can match Taiwan Semiconductor Manufacturing Co. by 2026. Intel originally obtained PSG back in 2015 when it purchased Altera for $16.7 billion.
This move reflects the robust sales in the semiconductor industry for Field Programmable Gate Arrays (FPGAs). Lattice Semiconductor, a leading producer of FPGAs, has seen its stock surge by 30% in the start of 2023 and reported 18% in sales growth in the last quarter. Moreover, AMD, Intel's major competitor, purchased FPGA maker Xilinx for a total of $35 billion in 2022.
FPGAs are simpler than the powerful processors found in computers and servers, yet they often are more supple, faster-acting, and energy efficient. They can be utilized in data centers, communications, video encoding, aviation, and other markets. In addition, FPGAs are also used to run certain Artificial Intelligence algorithms. Intel offers its FPGAs under the name Agilex. Although Intel does not separate out the sales of PSG, the firm confirmed in July that the division had achieved three consecutive record quarters. The PSG is part of Intel's Data Center and AI group, with sales of $4 billion during the second quarter.
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