Intel backtracks on Network and Edge Group spin off

• Intel announced in July it planned to spin off key elements of its Network and Edge Group (NEX) as part of its restructuring process
• But it has now reversed that plan after deciding it stands more chance of success as an in-house unit

Intel has reversed an earlier decision to spin off “key elements” of its Network and Edge Group (NEX), the part of the chip giant that is most relevant to the telecom sector, into a separate business as part of the company’s ongoing restructuring process.

That initial decision was announced in July as CEO Lip-Bu Tan, who took over in March this year, began implementing his restructuring plans to get the chip vendor back on its feet. 

But now Bloomberg has reported that Intel’s management has decided that the NEX business is more likely to have a successful future if it stays as part of the chip company’s core operations. 

“After a thorough review of strategic options for NEX – including a potential standalone path – we determined the business is best positioned to succeed within Intel,” the company told Bloomberg on Wednesday in an emailed statement. “Keeping NEX in-house enables tighter integration between silicon, software and systems, strengthening customer offerings across AI, datacentres and edge,” it added. 

The move comes in the wake of various investments in Intel by SoftBank Group, the US government and Nvidia, which have helped to shore up the chip giant’s financial position.   

The U-turn means that Intel is no longer in talks with Ericsson, a major NEX customer, about an investment in a standalone NEX business by the Swedish vendor, an option that was reported in August.  

- Ray Le Maistre, Editorial Director, TelecomTV