Intel Plans to Spin Off Its Networking Unit as CEO Looks to Shed Assets

Intel (INTC) is looking to spin off its networking unit as the struggling chipmaker moves to shed assets under the direction of new CEO Lip-Bu Tan, according to a report Friday. 

Intel has already started the process of courting strategic investors for its Network and Edge group, and notified customers of the move this week, CRN reported. Intel told CRN that it intends to remain an “anchor investor” in the business. That deal recalls Altera, the programmable chips unit that Intel in April agreed to sell a 51% stake in to a private equity firm. 

Intel did not immediately respond to Investopedia’s request for comment.

Tan, who took the helm of Intel in March, has said he would look to cut non-core assets and streamline the business as part of his efforts to engineer a turnaround. His moves so far have also included layoffs, an end to previously planned projects in Germany and Poland, and a slowdown in the already delayed construction of new facilities in Ohio.

“I do not subscribe to the belief that if you build it, they will come,” Tan told investors on Thursday’s earnings call, raising some concerns that Intel’s cost discipline under Tan could also mean a lengthy recovery and potentially hamper its ability to catch up with competitors. 

Shares of Intel tumbled nearly 9% Friday after the chipmaker posted a loss. The drop erased most of the stock’s gains for the year.