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Intel said it was unlocking more value for its shareholders by separating its Programmable Solutions Group.
David Paul Morris/Bloomberg
Intel plans to do an initial public offering for its programmable chip business.
On Tuesday, the chip maker announced it will separate its Programmable Solutions Group (PSG) from its core businesses.
“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,”
Intel
(ticker: INTC) CEO Pat Gelsinger said in the news release. The move will help “Intel product teams to focus on our core business and long-term strategy.”
In after hours trading session, Intel shares rose 2.3% to $36.52 following the announcement.
Intel acquired the business when it bought Altera for $16.7 billion in 2015. Altera was a leader in field-programmable gate array (FPGA) chips. FPGAs are often used in the early stages of hardware development products due to their flexibility in allowing for subsequent changes in functionality.
Intel said the restructuring would give PSG the ability to improve its growth and compete in the FPGA market, which serves customers in the data center, communications, industrial, automotive, aerospace and defense sectors.
PSG stand-alone operations will start on Jan. 1, 2024, and Intel will report PSG’s financials as a separate business unit when it reports its first quarter 2024 earnings results. Intel executive Sandra Rivera will become the chief executive officer of PSG.
Intel intends to conduct an IPO for PSG over the next two to three years and may also look at opportunities to divest a minority stake in the business to private investors.
The move comes after Intel completed a successful IPO last year of its
Mobileye Global
(MBLY) unit, which makes chips and software for autonomous driving.
Write to Tae Kim at tae.kim@barrons.com