Intel to Separate Networking and Communications Unit into Stand-Alone Company
Intel announced plans to spin off its networking and communications division into a separate entity, initiating the search for investors. The move comes under the leadership of new CEO Lip-Bu Tan, focusing on operational efficiency.
In line with efforts to revitalize the company, Intel aims to divest non-core assets, decrease expenditures, and trim investments and workforce.
Reuters disclosed in May that Intel contemplated divesting its network and edge enterprises, previously known as NEX in financial accounts.
Highlighting the strategy, Intel plans to retain a significant investment akin to Altera, ensuring future growth potential.
In April, Intel struck a deal to sell a majority stake in Altera’s chip business to Silver Lake for approximately $8.75 billion, marking a substantial valuation decrease from its 2015 acquisition.
Lip-Bu Tan confronts the task of reinvigorating Intel post an era of setbacks and costly manufacturing schemes, facing losses while navigating the competitive AI sector.
Intel shares plummeted 9% following warnings of potential chip manufacturing exit without securing a major client. The company reported unexpected Q2 losses and anticipated higher losses in Q3.
In Q1’s latest report, Intel integrated NEX into its data center and PC division, unifying financial reporting.
The telecom chip-making unit contributed $5.8 billion in 2024 revenue, composing roughly 11% of overall sales.
