Intel is accelerating the divestment of non-core activities and, as previously announced, is adjusting its strategy. Shortly after reports of a planned spin-off of the Network and Edge Group (NEX), Ericsson is considering investing hundreds of millions in this division.
This is according to a report by Bloomberg. The potential investment would give Ericsson a minority stake in NEX, a branch that develops chips for network and edge infrastructure. This technology has been part of Ericsson’s mobile network hardware for many years. Sources report that Intel is also in talks with other potential investors. No agreement has been reached yet, and there is a chance that the deal will not go through.
The talks follow Intel’s official announcement that its network and communications division will be spun off into an independently operating company. NEX will focus on chips for communications, networking, and Ethernet connectivity. Intel will remain a major shareholder, similar to the spin-off of chip subsidiary Altera earlier this year. At that time, the company sold 51 percent of the shares to Silver Lake for $4.46 billion. The transaction is expected to be completed in the second half of 2025.
Ericsson and Intel have been working closely together for many years. In early 2023, Ericsson announced that its future infrastructure will be built on Intel’s next-generation Xeon processors. In addition, the Swedish network giant uses Intel chips extensively in its 5G solutions. In addition to standard and custom variants of the Xeon D series, the two companies are also collaborating on various ASIC development projects.
Reorganization at Intel
Intel has struggled in recent years to keep up with competitors such as TSMC and Samsung. The foundry strategy previously pursued under former CEO Pat Gelsinger yielded too little, which contributed to his departure. Since then, the company has been trying to cut costs and divest non-core businesses.
Despite this restructuring, Intel will continue to invest in its existing chip roadmap for the time being. For example, the 18A technology will remain available to existing customers such as Amazon and Microsoft, and will also be used for Intel’s own products. The Panther Lake chip, based on this process, is scheduled for mass production in the second half of 2025.
However, a recent filing with the US SEC shows that Intel is seriously considering phasing out its foundry activities entirely. The development of the 14A process is considered extremely risky and capital-intensive, which means that investments will only be made if there are concrete customer interests underlying them. This possible change of course is part of a broader strategy in which Intel cut 24,000 jobs and halted the construction of European chip factories.