Intel is considering selling off its network and edge computing business—formerly reported as the NEX segment—as part of a strategic shift under new CEO Lip-Bu Tan, according to multiple sources familiar with the matter.

The move reflects Tan's broader effort to streamline Intel and concentrate on its historical strengths in PC and data center chips. At a recent event in Taipei marking Intel's 40th anniversary in Taiwan, Tan emphasized this renewed focus, noting the company holds approximately 68% of the global PC chip market and 55% in data centers. “That's something we're going to expand and build on,” he said.

Although Intel has yet to launch a formal sale process or solicit bids for NEX, sources say the company has begun preliminary discussions with third parties and investment banks about a possible divestiture. One source noted that Intel is assessing whether selling the business outright or forming a strategic partnership would better serve its long-term goals.

The network and edge unit, which supplies chips for telecom equipment, is no longer seen as strategically aligned with Intel's new direction. Additionally, Intel's networking segment faces stiff competition from dominant players like Broadcom, leading to questions about its future role within the company.

Discussions are still in the early stages, and Intel may ultimately pursue alternatives to a full sale. However, the company has already started reducing its non-core operations. In April, Intel sold a majority stake in its FPGA unit Altera to private equity firm Silver Lake for $4.46 billion, following earlier plans to spin it off via an IPO—similar to what Intel did with Mobileye in 2022.

As of the first quarter of 2024, Intel no longer reports NEX results separately, folding its $5.8 billion in annual revenue into its data center and PC businesses. This accounting change underscores the declining strategic importance of the segment under Tan's leadership.

Despite Tan's pledge to refocus on core areas, Intel has continued to lose market share in both data center and PC chips—further adding urgency to its restructuring efforts.