Intel may sell its networking and edge unit to focus on PC and data center chips

Intel is weighing the possibility of offloading its networking and edge-computing operations as part of a broader push by its new CEO to hone the company’s focus on its most profitable segments.

According to three individuals with direct knowledge of the discussions, the chipmaking firm, whose networking and edge group was formerly identified as “NEX” in its financial disclosures, has been in preliminary talks about a potential sale of the unit.

Intel wants to focus on profitable segments like PCs

The deliberations, which have yet to advance to a formal auction or solicitation of bidders, represent CEO Lip-Bu Tan’s intent to concentrate Intel’s extensive workforce on areas where the company has traditionally excelled: personal computer and data-center processors.

Speaking at a Taipei event marking Intel’s fortieth anniversary, Tan highlighted the firm’s dominant market positions, noting that Intel controlled approximately 68% of the PC-chip market and 55 percent of data-center processors and pledged to “expand and build on” those strengths.

While the idea of exiting the NEX organization has been under consideration internally, Intel has not officially launched a sale process or engaged an investment bank.

According to Reuters, one source familiar with the matter explained that Intel conducted interviews with prospective financial advisers in recent weeks, yet no formal advisor has been retained to date. All three sources requested anonymity, emphasizing that they were not authorized to speak publicly on confidential corporate deliberations.

Those close to the discussions also suggest that the strategic review stems from the perception that the former NEX unit’s offerings, ranging from chips for telecommunications infrastructure to various networking products, do not align with Tan’s refocused corporate vision.

“The telecom-chip business no longer fits within our core roadmap,” one insider remarked. Another observed that Intel’s networking division faces formidable competition from companies like Broadcom, which maintains a stronghold on critical market segments, making it less attractive under Intel’s streamlined strategy.

Intel struggles with shrinking PC and data center market share

Beyond an outright divestiture, Intel has explored alternative approaches, including potential partnerships or partial equity sales, with the aim of determining the most advantageous path forward for the NEX portfolio. Nevertheless, no definitive resolution has been reached, and it remains possible that Intel might pursue options other than a sale.

In the first quarter of 2025, Intel ceased reporting the NEX unit as a separate segment, instead rolling its revenues into its PC and data-center businesses. According to filings, the NEX unit generated $5.8 billion in revenue in 2024. This accounting change underscores Intel’s efforts to integrate and evaluate the performance of those operations alongside its core chipmaking divisions.

This would not be Intel’s first divestment under its current leadership. In April, the company sold a majority stake in its Altera programmable-logic business to private equity firm Silver Lake for $4.46 billion, a move designed to bolster Intel’s balance sheet and support its turnaround initiatives.

Earlier plans under former CEO Pat Gelsinger had contemplated an initial public offering for Altera, mirroring the 2022 spin-off of its autonomous vehicle sensor unit, Mobileye.

Despite such restructuring efforts, Intel continues to grapple with erosion in its share of both the PC and data center markets, prompting scrutiny from investors and analysts. Tan has repeatedly emphasized that future growth will depend on shoring up those foundational revenue streams, even as the company navigates broader industry challenges and intensifying competition.

Intel has declined to comment on the reported deliberations. As the company evaluates whether the NEX group’s assets might be better served under another owner or through strategic alliances, the outcome could reshape Intel’s product mix and reinforce its commitment to the processor domains that have shaped its legacy.

Cryptopolitan Academy: Tired of market swings? Learn how DeFi can help you build steady passive income. Register Now