Read: Intel’s internal note to customers on spinning off its networking division

Intel

Intel has formally announced plans to spin off its networking and communications division — the Network and Edge Group (NEX) — as a separate company. In a memo sent to customers and employees, the company shared that it has begun the process of identifying strategic investors for the business. The move is part of new CEO Lip-Bu Tan’s broader strategy to streamline Intel’s portfolio and focus on core product segments.

While the plan wasn’t directly addressed during Intel’s June 24 earnings call, Tan had referred to monetizing “non-core assets” — a process that has already included selling a portion of its stake in Mobileye. In a statement, an Intel spokesperson confirmed the direction:

“We plan to establish key elements of our Networking and Communications business as a stand-alone company and we have begun the process of identifying strategic investors. Like Altera, we will remain an anchor investor enabling us to benefit from future upside as we position the business for future growth.”

This development coincides with other internal restructuring efforts, including a 15 percent workforce reduction and a re-evaluation of Intel’s foundry ambitions.

The memo to customers, written by Sachin Katti — head of NEX and Intel’s Chief Technology and AI Officer — was obtained and verified by CRN. It outlines the motivations behind the move and attempts to reassure customers that support and services will continue uninterrupted.

“We have internally announced our intent to establish the NEX business as a stand-alone company. This new, independent entity will be focused exclusively on delivering leading silicon solutions for critical communications, enterprise networking, and ethernet connectivity infrastructure.”

“While Intel will remain an anchor investor in the new company, we have begun the process of identifying additional strategic and capital partners to support the growth and development of the new company.”

“This decision is rooted in our commitment to serving you better. There will be no change in the service or support you rely on today.”

“As a stand-alone company, NEX will be able to expand into new segments more effectively. Backed by Intel, this new company will be positioned to accelerate its customer-facing strategy and product roadmap by innovating faster and investing in new offerings.”

“We expect this transition to be seamless for our customers. What we expect to change is our ability to operate with greater focus, speed, and flexibility — all to meet your needs better.”

No specific timeline has been announced for the spin-off.