Intel (INTC) -) shares moved higher in early Wednesday trading following the chipmaker's move to spin-out a key division, with plans for a near-term IPO, as the group continues to streamline its business.
Intel said it would separate the Programmable Solutions Group, or PSG, as a standalone business in January, with the aim of listing it on a U.S. exchange sometime in the next two to three years. The division makes chips that act as a conduit between Intel's general purpose semiconductors and those designed for a binary task.
Intel said the group, which it purchased from Altera in 2015 for around $17 billion, will be run by Intel insider Sandra Rivera.
“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," said CEO Pat Gelsinger. "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," he added. "I am confident she will bring PSG that same dedication, energy and customer commitment.”
Intel has executed a number of deals over the past few years under CEO Pat Gelsinger aimed at simplifying its corporate structure and raising capital for foundry expansion plans. The group has floated a portion of its stake in Israel-based Mobileye, raising $861 million, and sold its NAND business to South Korea's SK Hynix for $7 billion.
Intel shares were marked 0.5% higher in early Wednesday trading to change hands at $35.88 each, nudging the stock's six-month gain to around 8.4%.
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