The chip manufacturer is spinning off its division responsible for programmable chips and is looking for investors. An IPO is also an option. However, Intel wants to remain the majority shareholder.

It will be Intel Programmable Chip Solutions Group (PSG) into an independent company, of which it wants to remain the majority shareholder. Intel PSG grew through its acquisition of Altera in 2015. Since then, Intel has integrated Altera into the organization, but now CEO Pat Gelsinger wants to do the opposite move.

FPG-what?

Altera and later Intel PSG specialize in this Field-programmable gate arrays, better known as FPGAs. An FPGA is a malleable chip that contains transistors arranged in logical blocks, but not in a fixed architecture like an x86 processor. Through the firmware, users can link these blocks together as they wish. This creates a unique chip tailored to specific tasks without the end user having to actually design and manufacture their own chip.

FPGAs are very interesting for organizations that want to accelerate their own workloads. The chip lies between classic processors, which are suitable for general tasks, and mass-produced accelerators such as GPUs and DPUs, which are produced due to sufficient demand. An FPGA is a relatively inexpensive way for a company to use a custom chip without actually manufacturing a custom chip.

The separation from Intel PSG comes as a bit of a surprise. Intel makes CPUs and more recently GPUs, so FPGAs fit well into the portfolio. Last year, AMD completed its acquisition of FPGA pioneer Xilinx for a record amount, precisely because FPGAs complement its portfolio so well.

More potential

But despite the growing popularity of FPGAs in many areas, including IoT and AI, the former Altera hasn’t fared particularly well under Intel’s reign. PSG’s focus has been primarily on the cloud and communications markets, which has resulted in the division missing out on opportunities in other sectors.

Gelsinger hopes that parting ways with PSG opens the door for a broader focus. Intel wants to release PSG, so to speak, which should be better for the division, but also helps Intel itself focus on its core business. The division is scheduled for January 1, 2024. Intel is now looking for new investors for PSG and is planning an IPO in about three years. However, the company wants to remain the majority shareholder.