Intel Corp. is reportedly considering offloading a part of its stake in Mobileye, a major chip supplier to the auto sector.
Bloomberg today cited sources as saying that the company could sell shares of Mobileye, formally Mobile Global Inc., via public markets or directly to a third party. Intel is also said to be “exploring options” for its NEX network equipment business. Separately, Reuters reported this morning that Qualcomm Inc. may seek to buy another Intel unit focused on designing chips for personal computers.
The reports come a month after Intel announced plans to cut its operating costs by $10 billion next year. The move was a response to a disappointing earnings report that sent the chipmaker’s stock plummeting more than 20%. As part of the initiative, Intel plans to lay off about 15% of its workforce.
Recent reports indicate that the chipmaker’s push to improve its financial performance could also involve other steps. Last Friday, rumors emerged that Intel may sell its foundry business, which uses the company’s fabs to make processors for other organizations. Over the weekend, Reuters reported that the chipmaker could also offload its Altera subsidiary, which makes field-programmable gate arrays.
The Mobileye share sale that Intel is reportedly weighing may be connected to the same financial optimization effort. The chipmaker currently holds an 88% stake in Mobileye, which makes processors that automakers can use to equip their cars with partly autonomous driving capabilities. The Intel unit also provides complete autonomous driving subsystems for vehicles that combine its chips with sensors and software.
Intel bought Mobileye in 2017 for $15.3 billion and took it public five years later. The stock market listing raised $861 million. Last year, Intel raised an additional $1.5 billion by selling a portion of its Mobileye stake.
It’s unclear how many shares Intel plans might sell in the new stock sale it’s reportedly weighing. According to Bloomberg, the potential deal will be considered during a Mobileye board meeting later this month.
The paper cited sources as saying that Intel is also “exploring options” for its NEX business. The latter unit makes IPUs, chips designed to speed up servers’ central processing units by offloading tasks such as scanning network traffic for malware. NEX also provides Ethernet adapters for connecting servers to network equipment, fiber optic equipment and related products.
The unit’s sales declined 1% year-over-year, to $1.3 billion, last quarter. Intel attributed the sales drop to lower demand from telecommunications providers. Excluding the carrier market, NEX’s revenue and operating margin both increased more than 10% on a year-over-year basis.
The parts of the unit that are experiencing double-digit sales growth might make a compelling acquisition target for a potential buyer. However, today’s Bloomberg report didn’t specify exactly what options Intel is considering for the unit. It’s unclear whether the company hopes to sell NEX or is eyeing a different type of transaction such as a public offering.
According to Reuters, Qualcomm believes that Intel might also consider offloading parts of its chip design business. The news agency today cited sources as saying that the former company has spent months developing a plan to purchase portions of the business. Qualcomm is said to be particularly interested in buying a unit that designs chips for desktop computers and laptops.
In response to the report, Intel issued a statement saying that it had not been approached by Qualcomm about a potential sale. The chipmaker added that it’s “deeply committed to our PC business.”
Qualcomm, which makes most of its revenue from supplying chips for handsets, is actively working to grow its share of the PC market. Last year, it debuted a laptop processor called the Snapdragon X Elite that incorporates technology from Arm Holdings plc. The chip combines a 12-core central processing unit with a graphics card and an artificial intelligence accelerator .