Intel is reportedly considering a significant strategic move: the sale of its networking and edge (NEX) business unit. This division, which accounted for $5.8 billion in revenue in 2024, is under scrutiny as new CEO Lip-Bu Tan spearheads a company-wide overhaul aimed at sharpening Intel’s focus on its core PC and data center chip operations. Sources familiar with the matter indicated to Reuters that Intel has engaged third parties who may be interested in a deal, though discussions are in early stages and no formal sale process has commenced. This potential divestiture is a key component of Tan’s strategy to streamline the semiconductor giant.
This exploration follows a series of decisive actions by Tan, who assumed leadership in March amidst considerable financial headwinds and escalating market competition. Intel has already initiated workforce reductions and recently agreed to sell a 51% stake in its Altera programmable chip unit to private equity firm Silver Lake, a deal valuing Altera at $8.75 billion.
These measures are part of a determined effort to improve Intel’s financial standing after the company disclosed an $18.8 billion net loss for 2024, its first annual deficit since 1986. The potential NEX sale underscores a clear intent to shed assets not deemed central to Tan’s vision for a more agile and focused “New Intel,” a vision where he has emphasized that “We have a chance to do something special together. In many ways, we are the founders of ‘The New Intel.’ We will learn from past mistakes, use setbacks to strengthen our resolve, and choose action over distraction to reach our full potential.”
Tan’s Resolute Reshaping Of Intel
Since taking the CEO position, Lip-Bu Tan has moved rapidly to restructure Intel. He has stressed a renewed concentration on the company’s historical strengths in PC and data center chips. During remarks in Taipei on May 20, Tan highlighted Intel’s significant market presence, noting it held approximately 68% of the PC chip market and 55% of the data center segment, and stated his intent to “expand and build on” these areas.
This strategic shift also involves significant leadership changes, including key data center and PC business heads now reporting directly to Tan, and the appointment of Sachin Katti—who previously managed the Network and Edge Group—as the new chief technology and AI officer.
Tan has been forthright about the internal hurdles, acknowledging in an April memo that feedback indicated Intel was perceived as “too slow, too complex and too set in our ways — and we need to change.” This candid assessment has fueled initiatives to flatten the organizational structure, simplify workflows, and empower engineering talent.
The overarching objective is to reverse a trend of deepening losses and regain ground in its core markets. The NEX business unit’s revenue was $5.8 billion in 2024, a slight 1% increase from 2023. Intel integrated NEX into its Client Computing and Data Center and AI segments in Q1 2025, a move some analysts saw as a precursor to divestiture.
Intel NEX Unit’s Future Under Review
The networking and edge group, responsible for producing chips for telecommunications equipment and various networking applications, is being re-evaluated as its alignment with Intel’s sharpened strategic direction comes into question. Reuters’ sources suggested the telecom chip unit might no longer fit the core strategy, and the broader networking business faces stiff competition from established entities like Broadcom.
Although Intel has reportedly engaged with investment bankers regarding a potential sale, no adviser has been hired, and alternatives such as forming a partnership or selling a partial stake in the NEX businesses are still on the table. Intel has officially declined to comment on these developments, and sources emphasize that no formal deal process has begun.
This potential divestiture is viewed by some as the most consequential move under Tan, reflecting a significant pivot as Intel contends with rivals such as Nvidia, TSMC, and Broadcom. The NEX group itself was established as a growth engine under former CEO Pat Gelsinger. Tan, emphasizing his approach, recently stated in Taipei, “I’m not a marketing person. The best way to recover Intel is execution, execution, execution.”
Broader Challenges And Strategic Imperatives
The consideration of selling the NEX unit unfolds against a backdrop of substantial operational and competitive challenges for Intel. The company is pushing to advance its critical 18A manufacturing process, vital for its Intel Foundry Services (IFS) ambitions. However, this effort is complicated by ongoing delays at its major Ohio factory project, completion of the first fab is now anticipated around 2030 or 2031.
In the artificial intelligence arena, Intel’s Gaudi accelerators have faced an uphill battle for market adoption against dominant offerings, prompting a revision of its AI chip roadmap and the cancellation of its Falcon Shores project earlier in the year.
Intel’s Q1 2025 financial results showed flat year-over-year revenue at $12.7 billion and a GAAP EPS loss of $(0.19), though non-GAAP EPS was $0.13. The company is also targeting reduced operating expenses and capital expenditures for 2025 and 2026. Furthermore, any possibility of a major manufacturing joint venture with competitor TSMC was effectively dismissed when TSMC CEO C.C. Wei firmly denied any such ongoing discussions in April. This denial reinforces Intel’s need to rely on its internal execution and strategic restructuring, including potential divestitures like that of the NEX unit, to navigate its complex path forward.
