For Ericsson, a stake in the business could help secure long-term access to Intel silicon, which underpins much of the company’s virtualized and cloud-native infrastructure
In sum – what to know:
Intel spins off networking unit – Intel is creating a standalone company from its Network and Edge Group (NEX), focused on silicon for 5G, Ethernet, and enterprise infrastructure.
Ericsson eyes minority stake – Ericsson is in talks to invest hundreds of millions for a minority stake — likely to secure long-term access to critical Intel silicon used in its virtualized infrastructure.
Strategic shakeup continues – The move follows Intel’s $4.4B Altera deal with Silver Lake, major job cuts, and the cancellation of planned manufacturing projects in Germany and Poland.
Ericsson is in talks with Intel to invest hundreds of millions of dollars in its networking infrastructure business, a move that would give the Swedish telecom giant a minority stake in Intel’s planned standalone networking unit, according to a Bloomberg report.
No agreement has been finalized, and sources familiar with the matter said Intel has also held discussions with other potential investors, meaning a deal with Ericsson may not materialize.
For Ericsson, a stake in the business could help secure long-term access to Intel silicon, which underpins much of the company’s virtualized and cloud-native infrastructure. That supply chain alignment may be a key strategic incentive for the investment.
Last week, CRN reported that Intel had circulated a memo to customers confirming its intention to spin off the networking business into an independent company. The new unit will be “focused exclusively on delivering leading silicon solutions for critical communications, enterprise networking, and Ethernet connectivity infrastructure,” according to the memo.
The news came the same day Intel announced plans to cut 15% of its workforce, reducing headcount to about 75,000 employees by year’s end. The restructuring is part of Intel’s broader strategy to streamline operations and sharpen its focus on core CPU and AI markets.
As part of that effort, Intel has also agreed to sell a $4.4 billion stake in its programmable chip business Altera to private equity firm Silver Lake, and has implemented additional staff cuts. Last week, the company confirmed it would also cancel heavily touted manufacturing projects in Germany and Poland, while consolidating some of its assembly and test operations.
