Intel is contemplating selling its network and edge divisions as the new CEO aims to streamline the company by eliminating non-essential parts, according to three sources familiar with the situation. Discussions regarding the potential sale of this group, previously known as NEX in Intel’s financial reports, are part of CEO Lip-Bu Tan’s strategy to concentrate the efforts of its large workforce on sectors where the company has traditionally excelled: PC and data center chips.
“That’s something we’re going to expand and build on,” Tan told executives in Taipei on Monday at a celebration of Intel’s 40th year, adding that the firm had a share of about 68% of the PC chip market and 55% of that for data centers.
Intel is contemplating the exit strategy for its NEX group and has reached out to potential buyers, according to sources familiar with the situation. However, a formal sales process has not yet been initiated, nor have any bidders been solicited, as per two sources who requested anonymity due to the confidential nature of the discussions.
Recently, Intel interviewed investment bankers to choose an advisor for the sales process, but has not yet made a hire, according to another source. Intel has not provided any comments on the matter.
The company is considering a sale because the businesses within the NEX group no longer align with the strategic focus set by CEO Tan, as indicated by two sources. The unit that produces chips for telecom equipment is seen as no longer beneficial to Intel’s core strategy, according to one source.
Additionally, Intel’s networking division may also be up for sale, as competitors like Broadcom dominate significant parts of that market, another source noted. Intel is evaluating its business portfolio to determine whether it would be more strategic to partner with another company or sell a stake, according to one source.
Discussions are still in the early stages, and Intel may opt for alternatives to a sale for the NEX businesses. In the first quarter of this year, Intel integrated the NEX financial results into its data center and PC divisions, ceasing separate reporting for the segment.
The NEX group generated $5.8 billion in revenue in 2024, according to securities filings. Intel has already begun divesting some business lines, having sold a majority stake in its Altera unit to SilverLake for $4.46 billion in April to support its recovery efforts.
Prior to the SilverLake transaction, the company was preparing to spin off Altera through a public offering under former CEO Pat Gelsinger, similar to its approach with Mobileye in 2022.
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