UPDATED 16:00 EDT / NOVEMBER 26 2019

INFRA

Report: Intel is looking to sell off its $450M home connectivity business

Intel Corp. may be looking to scale back its presence in the smart home market.

Citing multiple people familiar with the matter, Bloomberg on Monday night broke the news that the company has hired a financial institution to help find a buyer for its home connectivity unit.

The division makes chips for consumer routes and internet gateways, netting about $450 million in annual revenues. Qualcomm Inc. and Broadcom Inc. are the company’s major competitors in this segment.

The report is not entirely surprising, since Intel Chief Executive Officer Bob Swan has been pursuing an effort to shift the company’s focus away from areas where it lacks a clear competitive edge. One such area is the mobile modem market. The chipmaker offloaded its struggling mobile modem business to Apple Inc. in a $1 billion deal a few months ago and this week struck a partnership with MediaTek Inc., a Taiwanese semiconductor maker, to fill the gap the sale left in its product portfolio.

The next division that could see some changes is Intel’s memory business. The unit experienced a massive 19% revenue surge last quarter, raking in $1.29 billion for the company, but it lost $500 million during the same three-month period. Swan told analysts in April that he’s looking at bringing an external manufacturing partner into the fold to share the cost of producing chips.

The scaling back across Intel’s secondary businesses will free up resources for the company to invest in its two core focus areas: data center and personal computer chips. The chipmaker dominates both markets but has come under increased competition in recent quarters from rivals such as Advanced Micro Devices Inc., whose latest processors are breaking industry speed records.

Intel recently begun rolling out a new generation of central processing units based on a 10-nanometer architecture with better performance. Now, the company is working to tackle supply issues and lay the groundwork for the next wave of seven-nanometer processors. Swan recently shared his ambition to return Intel to the rapid pace of development it maintained in the heady days of Moore’s Law, when the company doubled its chips’ transistor density every two years.

Intel  is investing in the connected device market as well. The chipmaker’s Internet of Things group, which includes the home connectivity unit it’s reportedly looking to sell, posted revenues of $1 billion last quarter after growing 9% over the previous 12 months.  

Photo: Intel

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