Source: Caihua News Agency
Author: Mao Ting
Chip supplier$Intel (INTC.US)$It was announced that its Programmable Solutions Division (PSG) will operate independently from January 1, 2024, while Intel will continue to provide support. The purpose of this move is to accelerate the competitiveness of PSG's division in the FPGA market.
Intel said that starting with the results for the first quarter of 2024, PSG will report as an independent business unit.
Sandra Rivera (Sandra Rivera), vice president of Data Center and Artificial Intelligence Group (DCAI), will be PSG's CEO. She will continue to lead Intel's Data Center and Artificial Intelligence Group (DCAI) until a new leader is identified. Rivera has been responsible for Intel's cloud-based data center product development, including Intel Xeon and FPGA products. She is also responsible for driving the company's overall artificial intelligence (AI) strategy and product roadmap. Shannon Poulin (Shannon Poulin) has been appointed PSG's Chief Operating Officer (COO).
What is PSG?
PSG is mainly aimed at the FPGA market.
FPGA (Field Programmable Gate Array), Chinese name “Field Programmable Gate Array”, is characterized by being programmable, low power consumption, low latency, and parallel operation.
Current AI chips include GPUs, FPGAs, and ASICs (special purpose chips). Since FPGAs are highly flexible, they do not have specific functions at the time of shipment, and are particularly suitable for applications such as 5G and AI. FPGAs can be used in multiple markets, including data centers, communications, industrial, automotive, aerospace, and defense.
According to data provided by Intel, the FPGA global market may have a compound annual growth rate of 9% or more over the next five years, expanding from 8 billion US dollars in 2023 to 11.5 billion US dollars in 2027.
Currently, the largest FPGA manufacturer is alreadyAmerican Ultra Micro Corporation (AMD.US)Xilinx (Xilinx), the second-largest manufacturer is Altera, which was acquired by Intel for 16.7 billion US dollars in 2015. At the time, it was called the biggest acquisition in Intel history, which is now PSG.
Xilinx and Altera may together occupy 90% of the FPGA market, of which Xilinx is superior, or accounts for more than half of the market.
At the results conference for the 2nd quarter of 2023, Intel indicated that its PSG business achieved record revenue for the third consecutive quarter and continued to advance its product roadmap, including launching the Intel Agilex 7 with R-Tile chips in the 2nd quarter, bringing customers the first FPGA with PCIe 5.0 and CXL functions, and the only FPGA with hardware intellectual property (IP) that supports these interfaces. PSG plans to launch 15 new products in 2023, and has now launched 11.
What is the purpose?
Intel believes that the spin-off will help the sector obtain private and open market financing, accelerate the strategic repositioning of the business, and promote substantial value creation. Intel plans to promote PSG's listing in the next two to three years and assist PSG in obtaining financing from private investors to promote PSG's business development, but Intel will still retain most of PSG's interests. This is in contrast toMobileye (MBLY.US)It is the same as IMS's trading practices.
In 2022, Intel spun off Mobileye, an autonomous driving system solution company, and announced not long ago that it sold 20% and 10% of the interests of IMS, a multi-electron beam direct writing lithography equipment manufacturer, to Bain Capital and TSMC at prices of US$860 million and US$432.8 million respectively. The multi-beam mask writer provided by IMS is an important part of ensuring the operation of EUV process technology.
After Mobileye was spun off and listed, Intel still retained over 88% of its interests. Since it was listed on the NASDAQ exchange on October 26, 2022, Mobileye's cumulative stock price has increased by 95.76%, and its current market capitalization is 33.1 billion US dollars, which means that the market value held by Intel has reached more than 29 billion US dollars, which is equivalent to 19% of Intel's current market capitalization of US$15.5 billion. It is indeed a good way to unlock value for shareholders.
According to Intel, the spin-off of PSG and the spin-off of MobilEye, along with adhering to the IMS deal, are an important part of its IDM 2.0 strategy. The goal of the IDM 2.0 strategy is to drive the growth of its core business — IDM (Integrated Equipment Manufacturer). This is Intel's identity when it was founded in 1968 — a company that designs and produces its semiconductor chips.
After returning to Intel as CEO in 2021, Pat Gelsinger (Pat Gelsinger) proposed an “upgraded” “IDM 2.0” strategy, which includes a drastic expansion of production capacity, making Intel the main supplier with the strongest foundry capabilities in Europe and America to serve global customers and expand Intel's use of external foundries to supply other products. In the announcement of the planned spin-off of PSG, Gersinger stated that the spin-off of PSG's listing is an act by Intel that continues to release value for shareholders.
Judging from Intel's performance for the 12 months ended July 1, 2023, its core business, customer computing, is still an advantage, contributing $27.296 billion, accounting for 50.28% of total revenue, and operating profit of US$3,913 billion; while PSG's data center and AI (DCAI) underperformed, with revenue of US$16.235 billion, and operating losses of US$291 million. The spin-off may facilitate the independent development of related businesses and improve the efficiency of operations and financing.
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