Intel Considers Sale of Networking and Edge Business to Refocus Core Strategy

Intel is reportedly exploring the sale of its networking and edge (NEX) business as part of a broader strategic shift under new CEO Lip-Bu Tan, according to sources familiar with the matter. The move is part of Tan’s effort to narrow Intel’s focus to its traditional strengths in personal computer (PC) and data center chips, areas where the company holds dominant market shares of 68% and 55% respectively. While discussions have begun internally and with third parties, no formal sale process or bidding has been initiated yet.

The NEX group, once a distinct unit in Intel’s financial reporting, includes businesses that make chips for telecommunications and networking infrastructure. Intel has started internal reviews to determine whether a full sale, partial stake sale, or partnership would best align with its long-term strategic goals. Sources said the NEX business is no longer considered essential to Intel’s core operations, particularly as other companies like Broadcom have taken stronger positions in networking technologies.

Intel has started interviewing investment banks to potentially advise on the sale, though no banker has been officially hired. The discussions are still in the early stages, and Intel may yet decide to pursue a different path for the business unit. The company declined to comment on the matter publicly, while the sources spoke on condition of anonymity due to the sensitive nature of the talks.

The NEX group brought in $5.8 billion in revenue in 2024, but Intel has since merged its financial reporting for the segment with its main PC and data center divisions. This shift reflects Intel’s intent to streamline operations and place greater emphasis on its highest-performing units. The potential sale of the NEX group follows a recent $4.46 billion deal in which Intel sold a majority stake in its Altera unit to SilverLake, showing a broader trend of divesting non-core businesses.

Intel’s latest strategic pivot comes at a time of declining market share in both the PC and data center sectors, despite being the traditional revenue backbone of the company. Under Tan’s leadership, the goal is to refocus efforts and resources on areas with the highest growth potential and technological leadership. This also follows past moves like spinning off Mobileye and restructuring internal units to maximize efficiency and investor confidence in Intel’s long-term turnaround strategy.

Source: Reuters