Intel Corp (NASDAQ:INTC, ETR:INL) is considering selling its networking and edge businesses, previously grouped under its NEX division, as part of a strategic refocus under new CEO Lip-Bu Tan, according to a Reuters report.
Per the report, which cited people with knowledge of the proposed sale, Intel has begun preliminary discussions with potential buyers and interviewed investment bankers to advise on the possible sale, but no formal sale process or solicitation of bids has yet been launched.
The sale aims to streamline the company by shedding units that Tan does not see as central to Intel’s core strengths, which are personal computer and data center chips. Intel holds a dominant position in these markets, with about 68% share in PC chips and 55% in data center processors.
The NEX unit generated $5.8 billion in revenue in 2024 and includes operations that produce chips for telecommunications equipment and edge infrastructure.
Analysts at Wedbush view the report as “likely accurate” but questioned how much is left to sell and if a sale would make sense for Intel.
“Specifically, we believe much of Intel's NEX portfolio has centered around Xeon processors used for communications infrastructure, making it difficult to divest this business,” they wrote.
They added that while Intel still has some networking-oriented assets, like its NIC business, it has been losing market share since pushing for 40/100 GB standards, and shifting back to networking would divert it from focusing on AI system design, a direction its competitors are already pursuing.
Shares of Intel edged lower following the report, down 0.5% at about $21 late morning on Tuesday.