Intel is considering selling off its networking and edge (NEX) business unit, according to three sources familiar with the matter. This bold move reflects new CEO Lip-Bu Tan’s mission to streamline Intel’s focus on its most successful areas PC chips and data center chips. Speaking at Intel’s 40th anniversary event in Taipei, Tan shared that the company currently holds around 68% of the PC chip market and 55% of the data center market.

CEO Lip-Bu Tan’s Vision: Focus Back on PC and Data Center Chips

CEO Lip-Bu Tan said confidently,

“That’s something we’re going to expand and build on,”.

The NEX unit, once a key part of Intel’s reporting, made chips for telecom and networking equipment. However, insiders say these sectors no longer match the company’s core goals. Broadcom already dominates much of the networking market, making it harder for Intel to compete.

Intel has reportedly been discussing a potential exit from the NEX group and has engaged with third parties who might be interested in a deal. The company has even started interviewing investment bankers to select an adviser for the sales process though no one has been officially hired, and a formal sale process has not yet begun.

What’s Next for NEX? Early Talks, Big Decisions Ahead

Two sources explained that NEX businesses just don’t align with the sharp focus Tan wants for Intel’s future. Another noted that selling NEX could make room for more strategic partnerships or partial stakes, depending on what brings the most value.

In Q1 of 2024, Intel stopped reporting NEX results separately. The unit generated $5.8 billion in revenue last year, but its results are now included in other groups. This wouldn’t be Intel’s first big move. In April, it sold a majority stake in Altera to SilverLake for $4.46 billion. Previously, Intel had planned to spin off Altera through a public offering similar to what it did with Mobileye in 2022.

Despite its shift toward core operations, Intel has recently lost market share in both the data center and PC segments, highlighting the urgency behind Tan’s restructuring efforts. Although internal talks are still in early stages, one thing is clear: Intel is reshaping its future and fast.