Intel has unveiled plans to spin off its Programmable Solutions Group (PSG) into an independent entity by January 1, 2024. Intel says that this strategic move is part of an effort to increase equity investments, enhance value, and further harness the FPGA market's potential. Sandra Rivera will head PSG as CEO, with Shannon Poulin serving as COO.
The separation is expected to offer PSG greater autonomy, which is anticipated to drive its growth within the competitive FPGA sector, which spans from automotive to aerospace and from defense to datacenters. Intel says that with the spin-off, PSG will be better positioned to capitalize on these diverse sectors. Meanwhile, Intel and PSG are set to maintain a strategic partnership, particularly with Intel Foundry Services. This affiliation will enable PSG to provide customers with reliable supply predictability, vital for a resilient supply chain.
With the intended separation, Intel aims to enable PSG the liberty to grow its share in the FPGA market. Over the subsequent two to three years, Intel aspires to introduce an IPO for PSG. Intel says it is also open to collaborations with private stakeholders to invigorate business expansion, while still holding onto the majority of its shares.
Intel acquired Altera, its Programmable Solution Group, on December 28, 2015, for approximately $16.7 billion. This was Intel's largest acquisition in history and one of the largest mergers in the high-tech business. Back then it was considered as a very promising move for Intel as FPGAs greatly expanded the company's scope, particularly in the datacenter field. But it looks like Intel thinks that its programmable solutions business will perform better on its own.
FPGA's growth trajectory shown by Intel looks promising, with projections indicating a compound annual growth rate of over 9% for the total available market, potentially reaching a worth of $11.5 billion by 2027.
PSG is anticipated to commence its independent operations on January 1, 2024, while still receiving continued backing from Intel. Starting from the first quarter of 2024 Intel plans to present PSG as an individual business segment. Sandra Rivera's appointment as CEO of PSG is a logical move given her acquaintance with the business unit. She will continue her leadership role in DCAI until a suitable successor emerges.
Intel's decision echoes its broader corporate strategy, as evidenced by its previous actions like the Mobileye IPO in 2022 and partnerships in 2023. Such endeavors highlight Intel's commitment to its IDM 2.0 strategy, aimed at propelling growth in its central operations and maximizing shareholder value across its diversified assets.
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Anton Shilov is a Freelance News Writer at Tom’s Hardware US. Over the past couple of decades, he has covered everything from CPUs and GPUs to supercomputers and from modern process technologies and latest fab tools to high-tech industry trends.
Buying companies for billions of dollars only to spit them back out for less money than originally paid for a few years earlier. Seems to be a recurring theme lately. Companies have reached a level of vertical, horizontal, diagonal, spiral, upside-down, zig-zag, front-to-back, back-to-front, mirrored, etc. integration where they cannot effectively expand by integration anymore.Reply
They have to buy the companies to be able to use the IP, they can't not do it.InvalidError said:Buying companies for billions of dollars only to spit them back out for less money than originally paid for a few years earlier. Seems to be a recurring theme lately. Companies have reached a level of vertical, horizontal, diagonal, spiral, upside-down, zig-zag, front-to-back, back-to-front, mirrored, etc. integration where they cannot effectively expand by integration anymore.
They absolutely needed FPGA, even AMD had to merge with an FPGA company.
If spinning them off afterwards is better for them financially then that's what they will do.
InvalidError said:only to spit them back out
A digestive metaphor is perhaps more accurate if less appealing.
What was needed is absorbed and what is not needed is .... waste.
A company called Analogue uses FPGA for Retro Gaming Consoles. Because they use FPGA to basically to recreate the circuits, you have Zero Lag. It outputs to HDMI so you can play your old games on modern displays. Great Stuff! ( If your a Retro Gamer).Reply