Intel is further downsizing and will turn the Network and Edge group into a separate company. This plan also involves external investments.
Intel intends to divest the Network and Edge (NEX) division. NEX is to become a standalone company. For this plan, Intel is seeking external investors. Intel will also retain a stake in NEX. This was confirmed by a spokesperson to CRN.
The plan is reminiscent of the earlier spin-off of Altera. Intel acquired this FPGA specialist in 2015 for 16.7 billion dollars but spun off the company earlier this year. In April, Intel handed over 51 percent of the shares to an external investor. A similar scenario is prepared for NEX.
No Deadline
The new entity should focus on developing solutions for communication, networking, and Ethernet connectivity. There would be no impact on the support for existing customers. A timeline for the spin-off has not yet been established.
The spin-off of NEX fits into Intel’s downsizing strategy. CEO Lip-Bu Tan wants to make the company leaner so it can innovate more successfully in the CPU segment. There has been significant competition in recent years, both from AMD and the ARM ecosystem.
Late last week, Tan announced that he would further reduce Intel’s workforce. In the same breath, he scrapped the planned multi-billion dollar investments in Europe.
Not the First Divestment
Tan continues the downsizing regimen that Intel started under former CEO Pat Gelsinger. The Automotive division was recently shut down. Before that, it was Altera’s turn, and Intel Capital became an independent entity. The graphics division was already affected in 2022, but was integrated into other departments.