Intel Corporation (NASDAQ:INTC) shares are seen nearly 2% higher in Wednesday's early premarket trade, after the firm announced after yesterday's close it plans to spin out its programmable chip division as a standalone business, starting in January and ultimately hold an initial public offering (IPO) within three years.
The chipmaker has tapped Sandra Rivera, who currently leads its broader data center and AI group, to oversee the new Programmable Solutions Group.
The decision underscores the surge in demand for field programmable gate arrays (FPGAs), which essentially occupy a middle ground between Intel’s general-purpose chips and those created for a specific task. They’re flexible, power-efficient and can be programmed for use in data encryption, 5G telecommunications or a number of other technologies.
Intel acquired its programmable chips unit in 2015 when it bought Altera for $16.7 billion.
The move follows Intel’s spinoff of its self-driving subsidiary Mobileye last year and the sale of its memory chip unit to SK Hynix.
Intel shares were up 1.7% changing hands at $36.30 ahead of the open.