The News: Intel’s Field Programmable Gate Array (FPGA) division is being separated into a standalone company to allow the unit to nimbly chase the increasing opportunities in the expanding FPGA marketplace. The new company will be headed by Sandra Rivera, an Intel executive vice president who will be the CEO of the new business, which is being formed from what is now Intel’s Programmable Solutions Group (PSG). Read the full press release on the Intel Newsroom website.
Intel’s FPGA Unit Becoming a Separate Business To Drive FPGA Growth
Analyst Take: As the FPGA market continues to explode with new products and use cases, Intel is wisely breaking out its PSG unit to capture a larger share of this growing industry. I believe that this move is smart and strategic to take advantage of market momentum and take on Intel’s competitors more directly.
The new standalone PSG business operations will begin on January 1, 2024, with Intel providing ongoing support as it grows, according to the parent company. Intel says it will report PSG as a separate business unit when it releases Q1 2024 financials.
The new CEO, Sandra Rivera, will take the reins of the operation and will continue to lead Intel’s Datacenter and AI Group (DCAI) until a new leader of that division is brought in. In addition, Shannon Poulin has been named COO of PSG. Poulin is Intel’s corporate vice president of its Sales and Marketing Group and is general manager of its Global Markets and Partners.
FPGAs are used almost everywhere today, in the data center, communications, industrial, automotive, aerospace, and defense sectors, giving device makers flexible options to add capabilities and features to everything they build and sell to consumers, businesses, the government, healthcare operations, and more.
FPGAs are versatile integrated circuits that can be reprogrammed as needed to accommodate and introduce new features or code in the devices where they are used. This functionality makes them incredibly versatile for users who can make changes and keep their hardware investments running into the future as changes are introduced.
Adding even more value to the move is that its plans call for Intel and PSG to remain strategically aligned under the new structure, including PSG’s longstanding relationship with Intel Foundry Services (IFS), which is the chip manufacturing arm of Intel. By continuing this relationship, I believe that Intel is ensuring a critical part of its future success by building on these existing relationships that can work together to bring new products to the FPGA marketplace. Intel certainly knows how to conduct operations in the chip business, and it is smart to lean on its success here to drive growth in this related FPGA market as well.
In addition, I am also pleased that PSG’s Supply Resilience pilot program will continue to be used when PSG is separated from Intel because it is valuable to the company’s customers. That pilot program gives PSG customers greater supply chain predictability based on their needs, which I see as a huge benefit for customers who want to maintain a more resilient supply chain for planning and operating purposes.
What It Means: Intel’s FPGA Unit Separating From Intel
I like this gutsy move by Intel to spin off its PSG business unit as of January 1 and raise the idea of taking it public in 2 to 3 years. I have been vocal and persistent about feelings that FPGAs are a hot market and product group over the past few years.
The recognition of the importance of FPGAs and their market growth is why AMD bought Xilinx in 2022 and why Lattice Semiconductor has been on fire quarter after quarter for the past 13 consecutive quarters. There is money to be made in the booming FPGA market and smart companies know to jump in when the fire is blazing.
Intel spinning off its PSG business and taking it public, like it did with its Mobileye business in 2022, is good business, and I am excited to see Intel continuing to make these kinds of long-range moves.
Over the next 2 to 3 years, Intel said it plans to conduct an IPO for PSG and might explore other investment options as well while maintaining Intel’s majority stake.
I also congratulate Sandra Rivera on being appointed as CEO of the new company and Intel CEO Pat Gelsinger on this strong move to return shareholder value and maximize the opportunity to grow with the FPGA market.
I will be watching with great interest as Intel takes this journey deeper into the FPGA market with its PSG spinoff, while watching to see how the move motivates competitors. It is sure to cause a stir in the heated global FPGA market.
Disclosure: The Futurum Group is a research and advisory firm that engages or has engaged in research, analysis, and advisory services with many technology companies, including those mentioned in this article. The author does not hold any equity positions with any company mentioned in this article.
Analysis and opinions expressed herein are specific to the analyst individually and data and other information that might have been provided for validation, not those of The Futurum Group as a whole.
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