Intel is considering divesting its Network and Edge (NEX) businesses as part of a broader strategic realignment under CEO Lip-Bu Tan, according to three sources familiar with the matter. The move is in line with Tan’s renewed focus on Intel’s traditional strengths—PC and data center chips—which currently account for around 68% and 55% of market share respectively.
Key Developments:
- Intel has held preliminary discussions about exiting the NEX group and has engaged with third parties that may be interested, though no formal sale process or bidder solicitation has begun.
- The company has interviewed investment banks in recent weeks but has yet to appoint a financial advisor.
- The NEX business, which includes telecom and networking chips, is no longer seen as core to Intel’s strategy, especially with competitors like Broadcom dominating key segments.
Strategic Context:
- The NEX unit generated $5.8 billion in revenue in 2024 but has been folded into Intel’s data center and PC reporting segments.
- Intel’s shift in focus follows earlier divestitures, including the sale of a majority stake in its Altera unit to SilverLake for $4.46 billion in April.
- This echoes previous moves under former CEO Pat Gelsinger, such as spinning off Mobileye in 2022 via IPO.
While the internal discussions remain at an early stage, options under consideration include full or partial sale, strategic partnerships, or other structural realignments. Intel has declined to comment on the matter.
Despite the renewed focus, Intel has faced setbacks in its core segments, losing ground in both the data center and PC chip markets—raising the stakes for a successful pivot under Tan’s leadership.
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