Intel to discard its network division as part of the company's shrinking operations
In a move that signals a significant shift in its business strategy, Intel has confirmed the sale of its Network and Edge Group (NEX). The decision, which was first reported by CRN, comes as the tech giant looks to offload a portion of its operations and focus on core areas.
The sale of NEX is expected to attract a mix of private equity investors and strategic industry players. According to reports, Intel is identifying strategic investors and capital partners to support the new standalone NEX company. This approach mirrors Intel’s previous spin-off of its Altera unit, where a private equity firm (Silver Lake Partners) acquired a majority stake.
Venture capital and private equity investors are likely to be drawn to NEX due to its focus on high-growth sectors such as critical communications, enterprise networking, 5G infrastructure, and ethernet connectivity. Strategic technology firms with existing networking or telecommunications portfolios are also considered natural potential buyers. Companies like Nokia have been mentioned as plausible candidates given their synergy with networking silicon and telecommunication businesses.
Intel’s goal is to keep a significant stake while enabling the new entity to innovate faster and enter new markets with external capital backing. However, no official list of buyers or definitive valuation has been announced as of July 2025.
In a related development, Intel also announced a 15% workforce reduction and the closure of chip manufacturing sites in Poland and Germany. This move is expected to result in the loss of 5,000 staff. The earnings report showed Intel’s net losses growing to $2.9 billion compared to $1.6 billion in Q2 of last year, which may have contributed to the decision.
The sale of NEX was first reported by Reuters in May, and Intel’s stock dropped more than 8% on Friday following a flat earnings report. It's about time for Intel to take action, implying a sense of urgency or long-overdue change.
Despite the sale of NEX, Intel has not provided any new information about its plans to establish key elements of the Networking and Communications business as a stand-alone company, retain minority control, or remain an anchor investor in the new company, which were all mentioned in earlier reports. Similarly, the article does not provide information about Intel's total automotive group.
References:
- Intel to Sell Network and Edge Group, Seeks Strategic Partners
- Intel Confirms Sale of Network and Edge Group
- Intel to Spin Off Network and Edge Group
- Nokia as Potential Buyer for Intel's Network and Edge Group
- Venture Capital and Private Equity Interested in Intel's Network and Edge Group
- Venture capital and private equity firms are expected to be drawn to the new standalone NEX company due to its focus on high-growth sectors like 5G infrastructure, critical communications, enterprise networking, and ethernet connectivity.
- AI and technology companies with existing networking or telecommunications portfolios, such as Nokia, are considered natural potential buyers for the NEX group, given their synergy with these businesses.
- As Intel aims to keep a significant stake while permitting the new entity to innovate faster and enter new markets with external capital backing, the future of Intel's Networking and Communications business remains uncertain, with no official announcements made regarding its plans to establish key elements as a stand-alone company or maintain minority control.
