Intel, a leading semiconductor company, has unveiled plans to transform its Programmable Solutions Group (PSG) into a standalone business entity. This strategic move, set to take effect from January 1, 2024, is part of Intel CEO Pat Gelsinger’s efforts to extract more value from the company and drive a comprehensive turnaround.
The Programmable Solutions Group (PSG), originally established following Intel’s acquisition of Altera in 2015, specializes in creating customizable chips that can be tailored for various applications and industries. Pat Gelsinger, who assumed leadership in 2021, has been reshaping Intel and raising capital to support a significant revitalization effort. The acquisition of Altera, which cost Intel over US$14 billion, will potentially yield substantial value through this spin-off.
Investors have responded positively to Intel’s announcement, with the company’s stock price experiencing nearly a 3% increase in late trading on Tuesday. Intel outlined its plan for PSG, stating, “Over the next two to three years, Intel intends to conduct an IPO (initial public offering) for PSG and may explore opportunities with private investors to accelerate the business’s growth, with Intel retaining a majority stake.”
Programmable chips, also known as field programmable gate arrays (FPGAs), have the unique capability to have their functionality altered or updated even after installation in electronic devices. They find applications in communications hardware, data center equipment, and in the development of other chip designs. Despite their exceptional versatility and power, these chips have traditionally presented challenges in programming, hindering widespread adoption.
This strategic decision aligns with Intel’s previous move involving Mobileye Global, a manufacturer of chips for autonomous vehicles. Intel separated the business, returning a portion of it to public markets in the previous year, a model that the company is now poised to replicate with PSG.
