In October 2023 Intel announced that its Programmable Solutions Group (PSG), the FPGA business it gained by buying Altera, would operate as a standalone business from 1 January 2024, with an IPO planned within two to three years. For the FPGA market this meant a focused second supplier competing with AMD's Xilinx business, still tied to Intel for manufacturing but free to set its own priorities. This article was written at the time of the announcement; a short update at the end records what happened next.
Key takeaways
- Announced on 3 October 2023: PSG to run as a standalone business from 1 January 2024, led by Sandra Rivera as CEO, with Intel keeping a majority stake and an IPO targeted in two to three years.
- Intel bought Altera for $16.7 billion in 2015. PSG makes the Agilex, Stratix, Cyclone, Arria and MAX product families.
- The aim was to give the FPGA business its own focus, decisions and capital, and to raise value for Intel during a costly foundry build-out.
- Intel would remain PSG's main manufacturing partner through its foundry business.
- Update: the business was renamed Altera in 2024, and in 2025 Intel agreed to sell a 51 per cent stake to Silver Lake.
The announcement (October 2023)
Intel announced its intention to spin off its Programmable Solutions Group as a standalone business, starting from 1 January 2024. PSG is the division that produces Intel's FPGA products, such as Agilex, Stratix and Cyclone, which are used in applications ranging from data centres to automotive to aerospace. Intel acquired the business in 2015 when it bought Altera, one of the leading FPGA vendors, for $16.7 billion.
The spinoff is part of Intel's broader strategy of focusing on its core chip design and manufacturing businesses while realising the value of its other assets. Intel said that PSG could perform better as an independent entity, with more autonomy and flexibility to pursue growth in the FPGA market. Intel also planned an IPO for PSG in two to three years, while retaining a majority stake, and said it might bring in private investors before then.
Why Intel is spinning off PSG
Intel's decision rests on several factors.
The FPGA market is growing
The FPGA market has large potential. As reported at the time of the announcement, Intel expected the total available market for FPGAs to grow at a compound annual growth rate of over 9 per cent, reaching $11.5 billion by 2027 (Intel's projection, not re-verified). FPGAs are versatile chips that can be programmed after manufacture to perform specific tasks, such as accelerating artificial intelligence and machine learning, cloud networking, 5G, edge computing and more. They are also gaining ground in industrial, automotive, defence and aerospace systems, where they offer performance, flexibility, low power for the task and long product life.
To put the projection in perspective: a 9 per cent CAGR roughly doubles a market in eight years (1.098 is about 1.99). Working backwards, $11.5 billion in 2027 implies a market of about $8 billion in 2023 (11.5 divided by 1.094). That is an illustrative calculation from the stated figures, not an independent market estimate.
PSG was not reaching its potential inside Intel
Despite record revenues in recent quarters, commentary around the announcement suggested PSG had focused too heavily on data centre solutions, reported as about 60 per cent of its sales (not re-verified), while giving less attention to other high-growth and high-margin segments. Integration with Intel's other businesses also fell short of the hopes set at the time of the Altera purchase.
The first version of this article said Intel had not been able to deliver on its promise of combining FPGAs with its CPUs in the same package or socket. That needs correcting. Intel did ship such a product: in 2018 it released the Xeon Gold 6138P, a server processor with an Arria 10 FPGA in the same package. It did not become a broad product line, and the larger vision of FPGA logic built into mainstream Xeon parts did not materialise, which is closer to the point the original made. Rivals in this space include AMD, which completed its purchase of Xilinx in February 2022, and NVIDIA in accelerated computing.
Independence and agility
By spinning off PSG as a separate company, Intel hoped to give it more freedom to pursue its own strategy, vision and culture. PSG would be able to make faster decisions, invest more in R&D, expand its product portfolio and customer base, and work more easily with partners and suppliers. It would also be better placed to attract and retain talent and to raise capital through an IPO.
How Intel and PSG will work together
The spinoff does not cut ties completely. Intel and PSG were to keep a strategic partnership, especially in manufacturing and foundry services. Intel would continue to make PSG's chips on its own process technologies (the Agilex 7 family on Intel 10nm SuperFin and Agilex 5 on Intel 7, the node formerly called 10nm Enhanced SuperFin), and PSG would have access to Intel Foundry Services (IFS), Intel's foundry business for external customers. That continuity matters to FPGA customers, who often design a device into a product that ships for ten years or more and need reliable, predictable supply.
Intel would also continue to support PSG's products and customers through its sales channels and collaborate on joint solutions for data centre and cloud applications. The original version of this article also expected Intel to draw on PSG's expertise and IP for initiatives such as its Xe graphics architecture and its oneAPI software platform. oneAPI does support FPGA targets; the Xe graphics link was a forecast and is not confirmed.
What it means for the FPGA market
The spinoff was expected to have significant implications for the FPGA market and its players. The possible outcomes:
PSG becomes a stronger competitor
As an independent company, PSG could focus on its strengths in FPGAs and expand into new segments and regions. It could differentiate itself by drawing on Intel's process technologies, foundry services, CPU platforms, software tools and ecosystem, and compete more effectively on price, performance and power efficiency.
Pressure on the other vendors
AMD, which owns the largest FPGA business through Xilinx, would face a more focused rival. Smaller vendors such as Lattice Semiconductor, strong in low-power and small FPGAs, and Microchip, with its PolarFire flash-based families, would see a competitor that could now chase the mid-range and edge markets they serve. More competition in the mid-range is good news for buyers.
What customers should watch
- Long-term supply: confirmation that existing families stay in production for their promised life.
- Tool continuity: the Quartus Prime design software and IP licensing terms.
- Roadmap focus: whether the new company favours data centre parts or the industrial, automotive and edge parts many customers use.
- Foundry choice: whether future products stay on Intel processes or move to another foundry.
Update: what happened next
This section was added after the original article and is kept separate so the analysis above reads as written in October 2023.
- January 2024: PSG began operating as a standalone business, as planned.
- February 2024: the business relaunched under the Altera name, initially described as "an Intel company".
- April 2025: Intel announced an agreement to sell a 51 per cent stake in Altera to the investment firm Silver Lake, valuing Altera at a reported $8.75 billion, with Intel keeping 49 per cent. Raghib Hussain was named Altera's new CEO, succeeding Sandra Rivera.
- 2025: the Silver Lake transaction was reported as completed in the second half of 2025, making Altera an independent company majority-owned by Silver Lake. The planned IPO had not taken place at the time of this update.
The valuation, about half of the $16.7 billion Intel paid in 2015, shows how much Intel's circumstances changed between the purchase and the sale.
FAQ
What is Intel PSG?
The Programmable Solutions Group was Intel's FPGA division, formed from the 2015 Altera acquisition. It now operates again under the Altera name.
Why does an FPGA spinoff matter to chip designers?
FPGAs are used for ASIC prototyping, low-volume products and hardware acceleration. The health of the second-largest FPGA supplier affects pricing, tool support and long-term supply for many products.
Does Intel still make Altera's chips?
At the time of the announcement Intel planned to remain the main manufacturer. Current Agilex products are built on Intel process nodes; future choices are up to Altera.
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