[News] Intel Spins off Network and Edge Unit to Sharpen Focus on Core Strategy After $2.9B Q2 Loss

According to Tom’s Hardware, citing CRN, Intel is spinning off its Network and Edge Group (NEX) into an independent business unit. In a memo to customers, the company revealed its plan to seek external investment for the NEX unit. As CRN notes, an Intel spokesperson has confirmed the details outlined in the memo.

As the report indicates, the memo’s author, Sachin Katti—who heads the Network and Edge Group—did not specify a timeline for when the NEX spin-off might take place. The group primarily focuses on networking and communications products. According to the report, Intel intends to retain an ownership stake in the standalone NEX entity while pursuing additional external investors.

Tom’s Hardware highlights that the NEX spin-off reflects Intel’s broader strategy to divest non-core operations and sharpen its focus on x86 and AI. By separating the NEX division, Intel aims to double down on these strategic growth areas and move away from segments that compress profit margins, the report notes.

During Intel’s Q2 earnings call, Tan described the company as “overextended and inefficient,” pointing to a workforce reduction to 75,000 and a shift away from its once-aggressive foundry expansion. As Tom’s Hardware notes, Tan also warned that Intel’s next-generation 14A node could be canceled entirely if the company fails to secure a major external customer.

Although Tan did not mention the NEX spin-off during Thursday’s earnings call, he did discuss other steps Intel is taking to monetize its “non-core assets,” according to CRN. These include the recent partial sale of Intel’s stake in Mobileye. CRN also notes that Intel expects to finalize the sale of a majority stake in its Altera programmable chip business to private equity firm Silver Lake by late September.

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(Photo credit: Intel)