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.

Intel Sports

Intel shut down its sports division and sold a portion of the operation to Verizon in 2021 to focus on its core chip business, according to media reports from August of that year.

The chipmaker confirmed the move to Israeli publications Haaretz and Calcalist, saying that it is “removing volumetric video from Intel’s roadmap to focus on advancing innovative technologies that better support our core businesses and IDM 2.0 strategy.”

“Our main priority is to ensure a smooth transition for potential acquirers, employees, customers, and partners,” Intel said at the time.

The Intel Sports group mostly revolved around 3D technology called True View that generates 360-degree replays from sports events using volumetric data captured by dozens of high-definition cameras mounted along the perimeter of a stadium.

True View’s technology originated from Intel’s 2016 acquisition of Israeli company Replay Technologies, which was part of the company’s push into virtual reality at the time.

Intel Drone Light Shows

Intel put an end to its drone ambitions in 2022 with the decision to sell its drone light show business to a company operated by Elon Musk’s brother, Kimbal.

The chipmaker and Kimbal Musk confirmed in July of last year that Intel Drone Light Shows—which operated drone-powered light shows at various events, including the Olympic Games and Super Bowl halftime shows—was sold to Musk’s company, Nova Sky Stories.

The transaction included 9,000 Intel light drones. Some Intel drone employees also left to work for Nova Sky Stories. These employees included Daniel Gurdan, who led and founded Ascending Technologies, the startup that became the foundation of Intel’s drone business when Intel acquired it in 2016.

Intel told The Register that Intel Drone Light Shows was the last remnant of the company’s larger drone business, which, at one point, include commercial drones for inspections, land surveying and mapping.

Intel Optane

In late July of last year, Intel CEO Pat Gelsinger said the company “was making the difficult decision to wind down” its Optane memory and storage business.

The semiconductor giant had developed Optane products for PCs and servers using a new form of non-volatile memory technology called 3D XPoint that it created with Micron Technology as part of a joint venture. The two companies first revealed 3D XPoint in 2015.

The Optane products included memory modules that combined the persistent qualities of storage with performance that nearly rivaled DRAM. Intel had also developed 3D XPoint-based SSDs with lower latency and higher endurance than traditional NAND flash drives.

At the time of Intel announcing its exit from the Optane business, the company said it would record a $559 million inventory impairment as a result of the decision.

Earlier in the year, storage publication Blocks and Files reported that Intel’s Optane business made $392 million in revenue in 2021, based on an early 2022 filing with the U.S. Securities and Exchange Commission that revealed an incomplete picture of Optane’s recent financials. The publication also found that the Optane business recorded a $576 million operating loss in 2020 on top of generating $298 million for the first three quarters of the same year.

Network Switch Chip Business

Intel disclosed in late January that the company will end future investments in its Tofino network switch chip product line that originated from its 2019 acquisition of Barefoot Networks.

Pat Gelsinger, Intel’s CEO, made the disclosure in the company’s fourth-quarter earnings call and said that the decision wouldn’t impact the rest of the Network and Edge Group, or NEX for short, which served as the home for the company’s network switch chip efforts.

“NEX continues to do well and is a core part of our strategic transformation, but we will end future investments in our network switching product line while still fully supporting existing products and customers,” he said at the time.

When Intel acquired Barefoot Networks in 2019, the chipmaker said the startup’s Ethernet switch silicon and software provided the “programmability and ever-changing needs of the hyperscale cloud.”

“Barefoot Networks will support our focus on end-to-end cloud networking and infrastructure leadership, and will allow Intel to continue to deliver on new workloads, experiences and capabilities for our data center customer,” said Navin Shenoy, who was general manager of Intel’s Data Center Group at the time before departing in mid-2021.

WWAN Connected PC Business

Intel confirmed in March that it had exited its wireless wide area network (WWAN) business that developed 4G LTE and 5G connectivity solutions for PCs.

The move was first reported by analyst Jack Gold, who said the business was responsible for developing 4G LTE modems for PCs and providing software and design guides for 5G modems that were developed by Taiwanese chip designer MediaTek.

Gold said Intel was expected to transfer its 5G software technologies to MediaTek and Fibocom, another chip designer that makes 5G chipsets and modules. As for Intel’s 4G modem portfolio, the company had begun the discontinuation process for the products.

The analyst said the impact of Intel exiting the WWAN PC business would be minimal.

“This change is really not a big deal as it’s not really critical to Intel’s business objectives or revenues. Intel doesn’t make the 5G modems in any event, choosing to partner with MediaTek in developing a PC-ready 5G chipset, and so generates no additional revenues for 5G modem sales,” he wrote.

Intel Data Center Solutions Group

Intel disclosed in April that it had shut down its pre-built server system business, the Data Center Solutions Group, and sold it to Taiwan-based MiTAC, parent company of server vendor Tyan.

The chipmaker made the initial disclosure in a statement to server publication Serve The Home and said the “difficult decision” to exit the business was made to focus on its core chip businesses.

“As part of this plan, MiTAC, an edge-to-cloud IT solutions provider and longstanding ODM partner of DSG, will have the right to manufacture and sell products based on our designs. We are focused on ensuring the DSG team and its stakeholders are supported during this transition,” part of the statement from an Intel spokesperson read.

Intel Blockscale

Intel said in April that it had discontinued its Blockscale 1000 Series ASIC for cryptocurrency mining, but while no future generations have been announced, the company didn’t rule out more chips in the future.

The chipmaker issued an end-of-life notification to customers for the Blockscale 1000 chips and said in a statement that the move was done to “prioritize” its investments in the company’s core chip businesses as part of its IDM 2.0 strategy, which is an evolution of Intel’s integrated design manufacturing model.

The Blockscale 1000 Series was a short-lived product from Intel. Intel claimed that the chips were much more energy efficient than GPUs for proof-of-work cryptocurrency mining, and they only started shipping in late June of last year. Since then, Intel has not announced any plans for future generations.

When tech publication Tom’s Hardware asked Intel if it planned to exit the crypto-mining ASIC business, the company responded, “We continue to monitor market opportunities.”