Intel (INTC, Financial) is contemplating the divestiture of its Network and Edge Computing (NEX) business as part of CEO Lip-Bu Tan's strategic shift to focus on core operations. The company aims to streamline by cutting non-essential divisions, with NEX being one of them. This move is intended to strengthen Intel's traditional areas of expertise, namely PC and data center chips, where it holds a 68% and 55% market share, respectively.
Intel has begun assessing the optimal timing and method for exiting the NEX business and has reached out to potential partners. However, no formal sale process has been initiated. The company has engaged with investment banks to select advisors for the potential sale, though no official appointments have been made yet. Intel's decision to sell is driven by the misalignment of NEX with its strategic goals, especially as competitors like Broadcom dominate key market segments.
The discussions are in the early stages, and Intel may explore other options beyond selling, such as strategic partnerships. The NEX financials have been integrated into the broader data center and PC business segments since Q1 2024, with NEX generating $5.8 billion in revenue. Intel recently sold a majority stake in its Altera division for $4.46 billion to Silver Lake Capital as part of its restructuring efforts.
