Intel Announces Plans for IPO of Programmable Chip Business
Intel has revealed its intention to carry out an initial public offering (IPO) for its Programmable Solutions Group (PSG). This move comes as the chip maker looks to separate PSG from its core businesses and unlock additional value for its stakeholders.
The announcement made by Intel CEO Pat Gelsinger stated, "Our intention to establish PSG as a stand-alone business and pursue an IPO is another example of how we are consistently unlocking more value for our stakeholders." Gelsinger further emphasized that this decision will enable Intel's product teams to focus on the core business and long-term strategy.
Following the news, Intel's stock experienced an after-hours trading session increase of 2.3%, reaching $36.52.
Intel acquired PSG when it acquired Altera for $16.7 billion in 2015. Altera was known for its expertise in field-programmable gate array (FPGA) chips, which are commonly used in the initial stages of hardware development due to their flexibility in accommodating subsequent changes in functionality.
The restructuring will enable PSG to enhance its growth and competitiveness in the FPGA market, which serves various sectors including data centers, communications, industrial, automotive, aerospace, and defense.
PSG will officially commence its stand-alone operations on January 1, 2024. Additionally, Intel will report PSG's financials as a separate business unit in its first quarter 2024 earnings report. Sandra Rivera, an executive at Intel, is set to become the CEO of PSG.
In addition to the planned IPO, Intel may explore opportunities to divest a minority stake in PSG to private investors within the next two to three years.
It is worth noting that this move follows Intel's successful IPO last year of its Mobileye Global unit. Mobileye Global specializes in chips and software for autonomous driving.
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