<div id="readability-page-1">For years, semiconductor giant Intel (INTC -2.49%) has been exiting lines of business that don't fit with its overall strategy. Under former CEO Pat Gelsinger, Intel sold off its NAND and SSD operations, wound down its Optane memory unit, spun off Mobileye via an initial public offering (IPO), exited the prebuilt server business, gave up on Bitcoin mining chips, and sold a minority stake in its IMS Nanofabrication business. New Intel CEO Lip-Bu Tan will likely continue this trend as he refocuses the company on what it does best: namely, PC central processing units (CPUs), data center CPUs, and manufacturing. Intel sold a majority stake in field programmable gate array (FPGA) specialist Altera in April, and the company is now reportedly eying its network and edge businesses. Reuters reported on Tuesday that Intel was considering selling off these businesses, which were formerly reported under the NEX segment but consolidated with other segments starting in the first quarter of this year. While divesting the former NEX segment could be trickier than some of Intel's other exits, it would free Intel from yet another distraction as it refocuses on its core businesses. <div><img src="https://imageproxy.pbkrs.com/https://g.foolcdn.com/image//query-b3A9cmVzaXplJnVybD1odHRwczovL2cuZm9vbGNkbi5jb20vZWRpdG9yaWFsL2ltYWdlcy84MTkwOTQvZ2V0dHlpbWFnZXMtMTQ2NTE1NTgxMC5qcGcmdz03MDA?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" width="700" height="393" original-src="https://imageproxy.pbkrs.com/https://g.foolcdn.com/image//query-b3A9cmVzaXplJnVybD1odHRwczovL2cuZm9vbGNkbi5jb20vZWRpdG9yaWFsL2ltYWdlcy84MTkwOTQvZ2V0dHlpbWFnZXMtMTQ2NTE1NTgxMC5qcGcmdz03MDA"/>Image source: Getty Images. </div> <h2>What does NEX do?</h2> The businesses that were once part of the NEX segment focus on solutions for telecommunications networks and edge computing applications. This includes radio access networks, which connect base stations to individual mobile devices, as well as products aimed at the retail, healthcare, manufacturing, energy, and transportation industries. The NEX segment generated $5.8 billion in revenue during 2024, along with an operating income of $931 million. That works out to roughly 12% of Intel's total products revenue and 7% of Intel's total products operating income. These businesses are meaningful revenue generators but don't contribute much to the bottom line relative to PC and data center CPUs. While Intel has major competitive advantages in the PC and data center CPU markets, that's not necessarily the case in markets served by its network and edge businesses. In PCs, Intel is part of a duopoly with AMD, and competition from Arm-based CPUs has started to ramp up only recently. In the data center, while custom Arm-based CPUs are becoming more common, Intel and the vast ecosystem around its chips still reign supreme. Although Intel leads the radio access network (RAN) market, the company is exposed to the ups and downs of telecom capital spending trends. Arm is making a push to create chips based on its intellectual property (IP) viable for RAN deployments, which raises the prospect of greater competition in the future. The company also competes with Broadcom in multiple areas. <h2>A spin-off could be complicated</h2> The NEX businesses share a lot of IP with Intel's PC and data center businesses. The company sells chips aimed at edge computing workloads under its Core Ultra brand with a mix of architectures, including Arrow Lake and Raptor Lake. Intel also offers Xeon 6 chips for RAN networks and other applications, which are variants of the company's server CPUs. Intel manufactures its Xeon 6 lineup using its Intel 3 manufacturing process and its Raptor Lake chips using its Intel 7 process, while it largely outsources Arrow Lake production to Taiwan Semiconductor Manufacturing. With the former NEX segment intertwined with the rest of Intel, a spin-off or sale would likely be complex and take quite a bit of time to sort out. However, as it stands today, the NEX businesses aren't getting the resources or attention they need to thrive. With Intel focused on PCs, servers, and manufacturing, the company isn't going to win in the network and edge markets if it's viewed as an afterthought. A deal for the NEX businesses could raise billions of dollars in cash for Intel, bolstering the balance sheet and freeing up resources to invest in the manufacturing business. Part of Tan's turnaround plan is to simplify operations and make Intel more efficient, so exiting the NEX businesses would certainly make sense. While there's no guarantee Intel will proceed with any plans to exit its network and edge businesses, a sale or spin-off would be a step in the right direction as the company reins in the sprawl that has contributed to its current predicament. </div>

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Intel is reportedly considering selling its network and edge businesses as part of a turnaround strategy under new CEO Lip-Bu Tan. This follows a trend of divesting non-core operations, including its NAND and SSD units. The NEX segment, which generated $5.8 billion in revenue in 2024, is seen as a distraction from Intel's focus on PC and data center CPUs. A potential sale could raise significant cash and streamline operations, although it may be complex due to shared intellectual property with other segments.

- Intel has been divesting non-core businesses under former CEO Pat Gelsinger and is likely to continue this trend under new CEO Lip-Bu Tan, focusing on PC and data center CPUs.  
- The company is considering selling its network and edge businesses, which generated $5.8 billion in revenue in 2024 but do not significantly impact overall profitability.  
- A potential divestiture could complicate operations due to shared intellectual property, but it may also provide Intel with cash to strengthen its core manufacturing focus.

Intel Could Sell Another Major Business in Turnaround Bid