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Will Intel’s rush to shed non-core assets benefit potential buyers?

EDN | English | AcademicThink | April 3, 2025 | UndeterminedMergers & Acquisitions

Intel is undergoing a significant strategic shift under its new CEO, Lip-Bu Tan, who has announced plans to spin off non-core businesses to concentrate on core operations such as CPU design and contract chip manufacturing. This decision reflects a recognition that certain parts of Intel are no longer essential to its future. Historically, Intel has been moving in this direction, with previous divestments including the sale of its NAND memory business and the spinoff of FPGA maker Altera.

While Tan did not specify if the company will divest or simply streamline its non-core segments, it is clear that Intel aims to focus more aggressively on artificial intelligence (AI) and data center applications, alongside a new "Software 2.0" strategy. With changes already made, such as establishing Intel Capital as a standalone investment fund, the move to shed non-core assets is part of a broader effort to cut costs and enhance operational efficiency.

Among Intel's non-core businesses, Mobileye, known for automotive driver-assist systems, and its networking division are potential candidates for divestment. Mobileye was recently listed on Nasdaq, and although Intel has denied previous plans to sell a majority stake, it remains a likely target in this restructuring. The combined estimated value of Altera and Mobileye is around $17 billion to $20 billion, which could significantly improve Intel's financial standing. Ultimately, the success of this strategy hinges on whether Intel can maintain its current structure or opt to split its CPU and contract manufacturing operations, all while navigating a critical turnaround period in the semiconductor industry.

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