Pat Gelsinger’s transformation of Intel continued last week with the announcement that the chipmaker will turn its programmable chip group into a standalone business expected to go public by 2026.
The Santa Clara, Calif.-based company said on Oct. 3 that it will separate the Programmable Solutions Group (PSG) into a standalone business Jan. 1, 2024, and conduct an initial public offering for the operation in the next two to three years while soliciting private investments sooner.
[Related: Intel Hits Key Chip-Making Milestone In Gelsinger’s Comeback Plan]
Formed from Intel’s $16.7 billion acquisition of Altera in 2015, PSG develops field programmable gate arrays (FPGAs), complex programmable logic devices (CPLDs), and structured application-specific integration circuits (ASICs), among other products.
While PSG started out as a separate business unit under Intel, it became a part of the company’s Data Center and AI Group as part of a reorganization orchestrated by Gelsinger in 2021.
The move to spin off PSG marks yet another major change for the semiconductor giant under Gelsinger, who has offloaded several other businesses to sharpen Intel’s focus on chip manufacturing and design over his two-and-a-half year tenure as the company’s CEO.
The continuous shake-ups have been done in the name of fueling Gelsinger’s ambitious and expensive comeback plan, which calls for the chipmaker to introduce five advanced chip manufacturing nodes in four years to surpass Asian foundry rivals in state-of-the-art capabilities by 2025.
Part of Gelsinger’s plan includes a revitalized contract chip manufacturing business called Intel Foundry Services (IFS), which will count the standalone PSG business as a customer.
“This will give PSG the independence it needs to keep growing share in the FPGA market, differentiating itself with capacity and supply resilience from IFS and allowing Intel product teams to focus on our core business and long-term strategy,” Gelsinger said in a Monday statement.
What follows are six things to know about Intel’s plan to spin off PSG, including why the company plans to do it, who will lead the PSG business, how the spin-off will expand PSG’s business opportunities, the business’ financials and how a focus on new markets and the IFS strategy will mutually benefit.
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Dylan Martin is a senior editor at CRN covering the semiconductor, PC, mobile device, and IoT beats. He has distinguished his coverage of the semiconductor industry thanks to insightful interviews with CEOs and top executives; scoops and exclusives about product, strategy and personnel changes; and analyses that dig into the why behind the news. He can be reached at [email protected].
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