Intel To Demerge Its Programmable Solutions Group (PSG) Operations Into A Standalone Business, Followed by IPO

• Standalone operations for Programmable Solutions Group (PSG) expected to begin Jan. 1, 2024. 
• Sandra Rivera will assume leadership of PSG as chief executive officer (CEO). She will continue to lead Intel’s Data Center and AI Group (DCAI) until a new leader is identified. Shannon Poulin has been named chief operating officer (COO) of PSG. 
• Separation to enable potential private and public equity investments that will help accelerate strategic repositioning of the business and drive substantial value creation.
• Announcement follows successful completion of IPO for Intel’s Mobileye business in 2022, as well as announced private investments by Bain Capital Special Situations and TSMC into Intel’s IMS Nanofabrication subsidiary.

Intel Corporation on Tuesday announced its intent to demerge its Programmable Solutions Group (PSG) operations into a standalone business and seeks an IPO of PSG in next 3 Years. This will give PSG the autonomy and flexibility it needs to fully accelerate its growth and more effectively compete in the FPGA industry, which serves a broad array of markets, including the data center, communications, industrial, automotive, aerospace and defense sectors.

Intel entered FPGA industry by forming the Programmable Solutions Group (PSG), which manufactures reprogrammable chips. PSG was formed by Intel after it acquired Altera in 2015 for $16.7 billion in cash. Intel said it expects the FPGA sector could grow at a compound annual growth rate of over 9%, from $8 billion in revenue in 2023 to $11.5 billion by 2027.

Intel also announced that Sandra Rivera, executive vice president at Intel, will assume leadership of PSG as chief executive officer; Shannon Poulin has been named chief operating officer.

Standalone operations for PSG are expected to begin Jan. 1, 2024, with ongoing support from Intel. Intel expects to report PSG as a separate business unit when it releases first-quarter 2024 financials.

Over the next two to three years, Intel intends to conduct an IPO for PSG and may explore opportunities with private investors to accelerate the business’s growth, with Intel retaining a majority stake. Recently, Arm Holdings (NASDAQ:ARM) Plc, successfully held a $4.87 billion IPO, which stands as the largest since Rivian (NASDAQ:RIVN) Automotive's $13.7 billion offering in 2021.

Post the separation, the two Intel companies will remain strategically aligned, including continuing PSG’s relationship with Intel Foundry Services (IFS), as they work together to address key areas of the FPGA market. Building on PSG’s highly successful Supply Resilience program pilot, the relationship with IFS will also uniquely enable PSG to give customers greater predictability of supply aligned to their needs, ensuring a more resilient supply chain.

Intel CEO Pat Gelsinger said, "Our intention to establish PSG as a standalone business and pursue an IPO is another example of how we are consistently unlocking more value for our stakeholders. This will give PSG the independence it needs to keep growing share in the FPGA market, differentiating itself with capacity and supply resilience from IFS, and allowing Intel product teams to focus on our core business and long-term strategy. "

"Sandra has proven herself by reinvigorating DCAI, placing it on a path for success. I am confident she will bring PSG that same dedication, energy and customer commitment," the Intel CEO said.

Sandra Rivera

Notably, Sandra Rivera has been instrumental in putting Intel’s DCAI business back on the path to leadership and growth, with a more competitive product roadmap, an emphasis on delivering customer value and a strong focus on disciplined execution. Rivera’s track record of driving high-impact transformations extends to her leadership of the Network Platforms Group, where she advanced breakthrough ways to integrate silicon and software to create greater customer value and evolve network infrastructure to Intel-based solutions. Intel has already begun an extensive internal and external search process for a new leader for DCAI. Until that person is identified, Rivera will continue to lead DCAI.

On this announcement, Sandra Rivera said, "This is an incredibly exciting day for me and the PSG team. Reestablishing PSG as a standalone business will enable us to unleash our full potential as we drive for leadership in this demanding and essential part of the semiconductor industry. Our strategic relationship with Intel will continue to be an advantage as it gives us maximum flexibility in how we address fast-growing markets like automotive and data center and communications."

This announcement follows the successful completion of an IPO for the Mobileye business in 2022, as well as announced investments by Bain Capital Special Situations and TSMC into Intel’s IMS Nanofabrication subsidiary in 2023. Together, these transactions

 underscore Intel’s intense focus on advancing its IDM 2.0 strategy, driving growth in its core businesses and creating value for shareholders across all of its assets.

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