Components & Peripherals News
7 Businesses Exited By Intel Under CEO Pat Gelsinger
To sharpen the focus on its core but evolving chip-making business, Intel has decided to offload several businesses, including Intel Optane and the Intel Data Center Solutions Group, under CEO Pat Gelsinger. CRN explains the context around Intel’s recent business exits and what happened to each business.
Intel CEO Pat Gelsinger has been on a mission to make the company the lead chip manufacturer in the world once again, and for the semiconductor veteran, that has meant an intense focus on its core but evolving chip-making business at the expense of several adjacent businesses.
It didn’t take long for Gelsinger after he was appointed CEO in early 2021 to decide that Intel needed to offload some of its smaller businesses so that the company could invest greater resources into its evolving chip manufacturing strategy, known as IDM 2.0.
IDM 2.0 is an evolution of Intel’s integrated device manufacturing model, where it designs and fabricates its own chips. The strategy, established shortly after Gelsinger became CEO, shifts Intel to a new model, where it manufactures not only its own chip designs but also those of other chip designers as part of the company’s revitalized contract chip-making business, Intel Foundry Services. The company has also started to increasingly rely on third-party foundries such as TSMC for certain fabricating certain products.
The success of this strategy largely relies on Intel rebounding from previous manufacturing missteps that caused it to fall behind TSMC and Samsung, another top foundry, in advanced chip-making capabilities. This has resulted in Gelsinger pushing Intel to accelerate node development with the goal of exceeding TSMC and Samsung in producing leading-edge chips by 2025.
This shift in strategy has required a great deal of investment. As a result, Gelsinger told CRN in a 2021 interview, the company has been “rationalizing” all of its assets, investments and resources against its six core businesses: the Client Computing Group, the Data Center and AI Group, the Network and Edge Group, Intel Foundry Services, its graphics business and its Mobileye autonomous driving business.
“Simply put, to each of those business leaders, they have a clear market focus. And if the assets fit one of those six business units, then I want to invest in it. If it doesn’t, then I don’t — and then how do I move out of it? It’s sort of one by one, we’re just going to rationalize everything into those business units,” said Gelsinger, who was the subject of a CRN cover story in October 2021.
This rationalizing, combined with a massive cost-cutting plan that began in late 2022 due to a major downturn in business, has led to Intel exiting several businesses under Gelsinger’s leadership. (One of those businesses, Intel RealSense, continues to live on, albeit with a smaller portfolio of products, despite the company saying in 2021 that it was “winding down” the division.)
Intel has also reduced its stakes in a couple businesses during the Gelsinger era. After spinning out Mobileye as a publicly traded company but remaining the majority owner in 2022, the chipmaker sold a small $1.5 billion stake in June. Intel also announced in June that it had reached a deal to sell a roughly 20 percent stake in its IMS Nanofabrication business to private equity firm Bain Capital.
Even before Gelsinger became CEO in 2021, the company was in the process of exiting certain businesses. Most notably, the company reached a deal in 2020 to sell its NAND SSD business to South Korean chipmaker SK Hynix for $9 billion. The first part of the deal closed in late 2021, resulting in a new company owned by SK Hynix called Solidigm.
What follows are six businesses Intel has exited under Gelsinger’s leadership along with one that has a questionable future at best. These businesses had a diverse range of focuses: live sports, drones, memory, network switches, cellular connectivity for PCs, servers and cryptocurrency mining.