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Intel to Split Off Specialized Chip Business

Intel.inc says unit that makes programmable chips for defense, telecommunications will eventually go public

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WSJ on Intel

Intel INTC intends to sell a stake in a division that makes programmable chips widely used in the defense and telecommunications industries as Chief Executive Pat Gelsinger pushes forward with the company’s far-reaching and expensive turnaround bid.

The semiconductor giant said the unit, which makes chips that can be reprogrammed after they are manufactured, would begin to operate as an independent entity on Jan. 1, with a plan to sell shares in an IPO within two to three years.

The company may also explore private investment in the business, in which Intel is to retain a majority stake, it said. The move, Gelsinger said, would bring the company more focus on its core business and long-term strategy, while giving the unit independence that would help it grow its market share.

  • Intel shares rose 2.6% in after-hours trading Tuesday. The stock closed up 23 cents to $35.69.

Intel expects to report results for the unit separately when it releases its first-quarter earnings report next year.

Intel acquired the business through its $16.7 billion takeover of Altera in 2015. The unit made $484 million of revenue in the fourth quarter of 2021, the last quarter when its results were reported separately, or around 2.4% of the company’s total sales.



Image: Intel