May 20th, 2025:— U.S. chipmaker Intel Corporation is considering a potential sale of its networking and edge business unit, previously known as NEX, as part of a broader corporate restructuring under its newly appointed Chief Executive Officer, Lip-Bu Tan. According to three sources familiar with the matter, the move reflects Tan’s determination to refocus the company’s resources on its traditional strongholds—PC and data center chips.
The discussions, still at a preliminary stage, are part of a wider strategy by Tan to reverse Intel’s declining fortunes in its core semiconductor businesses. The NEX unit, which generated $5.8 billion in revenue in 2024, no longer aligns with the CEO’s vision for Intel’s future, the sources said, requesting anonymity due to the confidential nature of the deliberations.
While Intel has yet to initiate a formal sale process or invite bids for the NEX group, the company has begun engaging with potential advisers. Investment bankers have been interviewed to assist in evaluating strategic options, though no final decisions have been made and no banker has officially been hired, two sources confirmed.
Refocusing on Core Strengths
Since assuming the CEO role earlier this year, Tan has signaled a strong intent to double down on the company’s traditional markets. At a company event in Taipei on Monday marking Intel’s 40th year of operations, Tan emphasized the company’s commanding positions in key areas.
“That’s something we’re going to expand and build on,” he said, referring to Intel’s reported 68% share of the global PC chip market and 55% share in data center chips. “Our focus will be on regaining and strengthening leadership in the sectors that made Intel a giant in the first place.”
Tan’s remarks and actions indicate a clear departure from the previous diversification efforts under former CEO Pat Gelsinger. Gelsinger had pursued expansion into emerging chip markets, including edge computing, AI, and automotive, in an attempt to stay competitive with rivals like NVIDIA, AMD, and Broadcom.
However, under Tan’s leadership, the company is moving toward a more conservative and focused business model, prioritizing profitability and market leadership over exploratory ventures.
Market Realities and Competitive Pressure
Industry observers note that the networking and edge computing sectors are highly competitive, with entrenched players like Broadcom dominating critical segments. One source familiar with Intel’s internal deliberations noted that “the unit that makes chips for telecom equipment no longer serves the company’s long-term strategic goals.” Another source added that Broadcom’s dominance in networking chips makes it difficult for Intel to gain a foothold without significant investment and uncertain returns.
The NEX division, which previously played a key role in Intel’s diversification plans, was quietly absorbed into the company’s main operating segments earlier this year. Intel no longer reports NEX as a standalone unit, instead integrating its financials into its data center and PC chip results—a move that many analysts saw as the first step toward a possible divestiture.
This mirrors a broader pattern. In April 2025, Intel sold a majority stake in its programmable chip unit, Altera, to private equity firm Silver Lake for $4.46 billion. That deal marked a significant reversal from earlier plans to take Altera public, similar to what Intel had done with Mobileye in 2022. The sale helped fund Intel’s ongoing turnaround efforts, including manufacturing expansion and R&D investments in its flagship chip divisions.
What Lies Ahead
While the potential sale of NEX is far from finalized, analysts say it underscores the urgency with which Tan is trying to reshape Intel’s business amid increasing pressure from Wall Street and a fast-evolving tech landscape. Intel has lost considerable ground in the data center market to AMD and in AI processing to NVIDIA, with some of its core businesses facing declining market share despite their historic importance.
By exploring the sale of non-core assets, Tan hopes to streamline operations and redeploy resources to strengthen Intel’s competitive positioning in areas where it still holds significant market leverage.
“Tan appears to be taking a ‘back to basics’ approach,” said one semiconductor analyst based in San Jose. “He’s cutting away distractions and doubling down on what Intel has always done best. Whether that strategy is enough to recover lost ground in a brutally competitive industry remains to be seen.”
Internal discussions at Intel have reportedly also considered alternative strategies, including forming partnerships or selling a stake in the NEX portfolio instead of a full divestiture. The final path may depend on market interest and the strategic value prospective buyers see in the NEX assets.
As of now, Intel’s plans remain fluid. With no formal bids sought and no final decisions made, it’s unclear whether a sale will materialize. But what is evident is that under Lip-Bu Tan, Intel is undergoing a transformation—one marked by a clear-eyed focus on reclaiming its legacy, even if it means letting go of its recent past.
