Key Points:
- Intel is exploring the sale of its Network and Edge (NEX) businesses. The company is shifting its focus to core areas like PC and data center chips.
- No formal sale process has begun, but investment bankers have been consulted.
- The NEX unit generated $5.8B in revenue in 2024 but is now considered non-essential. Intel recently sold a majority stake in Altera to Silver Lake for $4.46B.
- CEO Lip-Bu Tan is pursuing a strategy to streamline operations and regain market share.
According to sources familiar with the matter, Intel is considering selling its Network and Edge (NEX) business units as part of a broader restructuring plan under its new CEO, Lip-Bu Tan. The potential divestiture reflects Tan’s strategy to streamline operations and refocus the company on its traditional strengths—PC and data center chips.
Intel has not formally launched a sale process or solicited bids yet, but it has engaged in preliminary talks and interviewed investment bankers in recent weeks. The company is still evaluating whether a complete sale, a partial stake divestment, or a strategic partnership would best align with its new direction.
Once a standalone reporting segment, the NEX group is consolidated into Intel’s PC and data center units. It generated $5.8 billion in revenue in 2024 but is now seen as non-core to the company’s mission, especially as competitors like Broadcom dominate the telecom chip space. Intel believes the networking business and telecom equipment chips are unlikely to support its core growth objectives.
At a recent Intel event in Taipei, Tan highlighted the company’s significant market share — 68% in PCs and 55% in data centers — as the foundation for future expansion. However, Intel has been losing market share in both areas, prompting the need for a sharper strategic focus.
The move comes after Intel sold a majority stake in its Altera unit to Silver Lake for $4.46 billion in April, marking a continuation of asset restructuring efforts. Previously, under ex-CEO Pat Gelsinger, Intel had spun out Mobileye and planned to do the same with Altera.
With its new strategy, Intel aims to rebuild its competitive edge, concentrate on profitable core areas, and optimize its vast workforce by exiting businesses that no longer align with its long-term vision.
