That doesn’t explain why Intel made the decision to pursue spin-off in the first place. In July, NEX chief Sachin Katti issued a memo that outlined plans to establish key elements of the Networking and Communications business as a stand-alone company. It looked like a done deal, experts said.
Jim Hines, research director for enabling technologies and semiconductors at IDC, declined to speculate on whether Intel could get a decent offer but noted NEX is losing ground. IDC estimates Intel’s market share in overall semiconductors at 6.8% in Q3 2025, which is down from 7.4% for the full year 2024 and 9.2% for the full year 2023.
Intel’s course reversal “is a positive for Intel in the long term, and recent improvements in its financial situation may have contributed to the decision to keep NEX in house,” he said.
When Tan took over as CEO earlier this year, prioritized strengthening the balance sheet and bringing a greater focus on execution. Divest NEX was aligned with these priorities, but since then, Intel has secured investments from the US Government, Nvidia and SoftBank that have reduced the need to raise cash through other means, Hines notes.
“The NEX business will prove to be a strategic asset for Intel as it looks to protect and expand its position in the AI datacenter market. Success in this market now requires processor suppliers to offer a full-stack solution, not just silicon. Scale-up and scale-out networking solutions are a key piece of the package, and Intel will be able to leverage its NEX technologies and software, including silicon photonics, to develop differentiated product offerings in this space,” Hines said.
