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Update: Intel declined to comment.
Intel (NASDAQ:INTC) is thinking of selling its network and edge businesses as the company intends to divest parts which its new CEO does not see as vital, Reuters reported, citing people with knowledge of the matter.
Discussions on the potential sale of the group, once known as NEX in Intel’s financial results, are part of CEO Lip-Bu Tan’s strategy to focus its thousands of employees on areas in which it has historically done well — personal computers, or PC, and data center chips, the report added.
“That’s something we’re going to expand and build on,” Tan told executives in Taipei on Monday at a celebration of the company’s 40th year, noting that the chipmaker had a share of around 68% of the PC chip market and 55% of that for data centers, according to the report.
Intel said in an email to Seeking Alpha that it does not comment on rumors.
Intel has considered when and how to divest the NEX group and talked to third parties who could be interested in a deal, the report noted.
However, Intel has not yet started a formal deal process for the unit, and has not solicited bidders, the report added.
In recent weeks, Intel has interviewed investment bankers to choose an adviser for the potential sale process. However, the company has not yet hired a banker.
The company is exploring the option to divest the unit because the business does not seem to be relevant to the focus area Tan has for Intel. The unit which makes chips for telecom equipment will no longer support Intel’s core strategy, the report added.
In addition, Intel’s networking business too could be divested because companies such as Broadcom (AVGO) have a grip on vital portions of that market, the report noted.
Intel has discussed the businesses with the aim of deciding if it would make strategic sense to partner with another company or sell a stake in it. However, the talks within the company are at an early stage and it could decide on other options besides a sale of the units.
In its first quarter results, Intel said that In the first quarter of 2025, it made an organizational change to integrate the Network and Edge Group, or NEX, into the Client Computing Group, or CCG, and Data Center and AI, or DCAI, segments and modified Intel’s segment reporting to align to this and certain other business reorganizations.
In 2024, the NEX unit had generated $5.8B, up 1% versus 2023.
Intel has already taken steps to reorganize its business. Last month, Intel agreed to sell 51% of its stake in Altera to Silver Lake, a global technology investment firm.
In March, Tan, in his first public appearance since taking the helm, vowed to refocus on innovation and called on customers to provide harsh feedback on the company.