On Tuesday, Intel (NASDAQ:INTC)'s CEO Pat Gelsinger announced the transformation of the Programmable Solutions Group (PSG) into a semi-autonomous chip business. The move signifies a departure from Intel's previous revenue reporting practices, which were in place until 2021.
PSG specializes in Field Programmable Gate Arrays (FPGAs), chips that can be reprogrammed after installation. This capability allows for alterations in functionality, highlighting Intel's innovative approach within the chip industry. As an InvestingPro Tip points out, Intel is a prominent player in the Semiconductors & Semiconductor Equipment industry. The group was formed following the acquisition of Altera in 2015 and later expanded with the acquisitions of eASIC and Omnitek.
In recent years, PSG has seen significant growth, with revenues swelling from $1.9 billion in 2021 to $2.9 billion by mid-2023. According to InvestingPro's real-time metrics, Intel's revenue for the last twelve months (LTM2023.Q2) was reported at 54.04B USD. An anticipated downturn in the chip market, as suggested by analysts, could result in a temporary drop in revenues. Intel's revenue growth for the same period was at -26.36%, which aligns with the analysts' expectations of a sales decline.
Gelsinger confirmed that PSG will function autonomously and is being prepared for an Initial Public Offering (IPO) in the coming years to attract more investors. Starting from 2024, Intel plans to report PSG's financials separately, a strategy that echoes those used for the Mobileye IPO and the IMS Nanofabrication stake sale.
These fundraising initiatives are part of Intel's IDM 2.0 strategy, aiming to establish the company as a third-party manufacturer for fabless chip designers. Despite the recent challenges, Intel has maintained its dividend payments for 32 consecutive years, an InvestingPro Tip that might interest potential investors. As of LTM2023.Q2, the dividend yield was 1.39%.
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