The company said its Programmable Solutions Group will have an independent balance sheet as it heads toward independence. The company will continue to support the business and retain a majority stake and could also seek private investment.

Sandra Rivera, who leads Intel’s broader Data Center and AI group, will become PSG CEO. Intel will manufacture the group’s chips.

If it seems familiar, this is what Intel did with Mobileye, with both companies doing somewhat well.

CEO Patrick Gelsinger wants to focus on the foundry business and core processors to catch Taiwan Semiconductor Manufacturing Co in manufacturing by 2026. Intel acquired the FPGA business when it bought Altera for $16.7 billion 2015.

“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,” Gelsinger said.

The move also highlights the strong demand in the semiconductor industry for field programmable gate arrays or FPGAs. Lattice Semiconductor, a maker of FPGAs, has seen its stock rise about 30 per cent so far in 2023 and reported 18 per cent growth in sales in the most recent quarter. 

FPGAs are more straightforward than powerful processors but are often more flexible, respond faster and can be more power-efficient. They’re “programmed” after they’re shipped for specific uses in data centres, telecommunications, video encoding, aviation and other industries. FPGAs can also be used to run some artificial intelligence algorithms.

Intel’s FPGAs are sold under the Agilex brand. Intel didn't break out its PSG sales yet but said in July that the unit had three record quarters, offsetting a slump in server chip sales.