Intel to IPO programmable chip unit

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Intel has announced that it will spin off its Programmable Solutions Group (PSG) as a standalone business and pursue an IPO in the next two to three years. The move is part of CEO Patrick Gelsinger’s strategy to control costs and focus on the foundry business and core processors in an effort to catch Taiwan Semiconductor Manufacturing Co. (TSMC) in manufacturing by 2026.

Under this restructuring, PSG will establish its own balance sheet as it progresses towards independence. While Intel will continue to provide support and maintain a majority stake, the possibility of seeking private investment is on the table. Sandra Rivera, who currently leads Intel’s Data Center and AI group, will assume the role of PSG CEO, with Intel handling the group’s chip manufacturing.

This move follows Intel’s previous spinoff of Mobileye, its self-driving subsidiary, demonstrating the company’s commitment to cost control and a focused approach on the foundry business and core processors, aiming to rival Taiwan Semiconductor Manufacturing Co. by 2026. The field programmable gate arrays (FPGAs) business, now part of PSG, was acquired when Intel purchased Altera for $16.7 billion in 2015.

Intel’s CEO, Patrick Gelsinger, emphasized, “Our intention to establish PSG as a standalone business and pursue an IPO is another example of how we are consistently unlocking more value for our stakeholders.”

Intel’s FPGAs are sold under the Agilex brand. Intel doesn’t break out PSG sales yet, but said in July that the unit had three record quarters in a row, offsetting a slump in server chip sales. PSG has been part of Intel’s Data Center and AI group, which generated $4 billion in sales in the second quarter.

The sources for this piece include an article in CNBC.

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