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Intel’s Bold Restructuring Plan Begins to Take Shape
Intel, once the undisputed king of semiconductors, is now considering a major shift in strategy as it contemplates selling off its Network and Edge (NEX) business. This move aligns with the company’s new direction under CEO Lip-Bu Tan, who is steering Intel back to its traditional strongholds: PC and data center processors. As reported by Reuters, Intel’s potential divestiture of NEX could mark one of the most pivotal decisions in its recent history.
The NEX unit, which generated \$5.8 billion in revenue in 2024, was originally positioned as a growth engine under former CEO Pat Gelsinger. However, that vision has faltered as the unit struggled to keep up with industry leaders like Broadcom in the edge computing and telecom sector. Tan has made it clear that the future of Intel lies in doubling down on its x86 CPU franchise, where it still holds dominant market shares — 68% in PCs and 55% in data centers.
Preliminary talks with external parties and investment advisors are already underway, though no formal sale process has been initiated. Internally, the consensus is growing that the NEX business no longer aligns with Intel’s long-term strategic goals. The unit’s integration into other segments earlier this year was an early indicator of this strategic pivot.
This move follows a pattern. Just last month, Intel sold a majority stake in its Altera programmable chip division to private equity firm Silver Lake for \$4.46 billion. That decision, along with the potential NEX sale, points to Tan’s strategy of divesting non-core assets to reinforce Intel’s core business and restore its reputation.
Tan’s no-nonsense leadership style is already shaking up Intel’s corporate culture. Known for prioritizing execution over hype, he has emphasized direct communication and accountability, even encouraging engineers to contact him personally with bad news. It’s a clear signal: Intel is getting serious about cleaning house and focusing on what it does best.
What Undercode Say: Strategic Reset or Signal of Weakness?
Intel’s move to consider selling its Network and Edge (NEX) business is more than just a financial decision — it’s a strategic reset that could reshape the company’s future in the hyper-competitive semiconductor market.
Let’s break it down:
The NEX business was once touted as the future of Intel’s growth, focused on edge computing and telecom infrastructure — both of which are vital areas in the expanding 5G and IoT ecosystems. However, despite a significant \$5.8 billion in revenue last year, NEX failed to become a cornerstone of Intel’s business model. Why? The market has been increasingly dominated by specialized players like Broadcom, which have carved out deep expertise and customer trust in this niche.
This signals a deeper problem: Intel’s previous diversification strategy under Gelsinger spread resources too thin, venturing into areas where Intel lacked competitive advantage. Lip-Bu Tan, by contrast, is bringing a laser focus on execution and core competencies. By exiting NEX, Intel may be acknowledging that it needs to pick its battles more wisely.
From an
However, it’s also a gamble. By shedding NEX, Intel risks losing relevance in future-forward segments like edge AI and 5G — areas that, while tough now, could boom over the next decade. If Nvidia and Broadcom continue to expand their reach, Intel could find itself locked out of key innovation corridors.
Another concern is talent and morale. Constant reshuffling and divestitures can lead to instability, pushing away skilled engineers and creating uncertainty within the workforce. Tan’s emphasis on accountability is commendable, but cultural overhauls are tricky, especially in a legacy company like Intel.
Still, if Intel can streamline operations and execute flawlessly — which is Tan’s mantra — this pivot might just restore the company’s stature. The NEX sale isn’t the end of innovation for Intel; rather, it could be the start of a more focused and sustainable path forward.
🧠 Fact Checker Results
✅ Reuters verified internal talks and advisor interviews on the potential sale.
✅ Financial filings confirm \$5.8 billion in 2024 NEX revenue.
✅ Intel has not publicly denied the divestiture rumors, aligning with its usual non-comment stance.
🔮 Prediction
Intel is likely to finalize a partial or full sale of the NEX unit within the next 6 to 12 months. This will signal a larger transformation toward a leaner, execution-driven Intel that prioritizes legacy strengths over experimental growth. Expect a stronger focus on AI chips in data centers, continued investment in advanced x86 nodes, and possibly more divestitures in 2025 as Tan continues to reshape the company’s DNA.
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Reported By: calcalistechcom_2240b5dfa9754688a665d906
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