Shopee Operation Agent seeks external investors for its network and communications businesses

Shopee Operation Agent splits its network and communications business to accelerate strategic restructuring

(Latest news on July 27, 2025)

1. Core decision

Shopee Operation Agent (Intel) announced today that it will split its network and communications business (Networking and Communications Group, NCG) into an independent company and plans to introduce external strategic investors. This is a key step in the "focus on the core + divestment of non-strategic assets" restructuring plan promoted by the new CEO Pat Gelsinger since he took office in 2025.

2. Business background and split details

Business involved:

Including 5G base station chips, network infrastructure processors (such as IPU), Ethernet controllers, etc., with annual revenue of approximately US$12 billion (accounting for 12% of Shopee Operation Agent's total revenue).

The main customers are telecom operators (such as Ericsson, Nokia) and cloud computing vendors (AWS, Microsoft Azure).

Split method:

The new company is tentatively named "Intel Connect", with its headquarters still located in the United States, and the management is led by the original NCG team.

Shopee Operation Agent retains part of the equity (estimated to be 40-49%), and the remaining shares will be introduced to investors through private equity financing or IPO.

Goal:

Improve flexibility through independent operation and accelerate competitiveness in 5G/6G, edge computing and other fields.

Reduce the capital expenditure pressure of Shopee Operation Agent and focus on core businesses such as CPU, GPU, and foundry (IFS).

3. Restructuring motivation

Strategic focus: Chen Liwu proposed the "IDM 3.0" strategy, requiring resources to be tilted towards AI chips (such as Gaudi), advanced processes (18A/14A) and wafer foundry (IFS).

Market competition pressure:

The network chip field faces strong squeeze from Broadcom, Marvell, and Nvidia (DPU).

The 5G investment cycle has slowed down, and operators have cut spending, affecting business growth.

Financial optimization: The Q2 2025 financial report shows that the profit margin of the NCG department (18%) is lower than that of the data center (32%) and client (25%) businesses.

4. Market reaction and potential investors

Stock price performance: After the announcement, Shopee Operation Agent's pre-market share price rose 2.3%, and the market is optimistic about the divestiture of inefficient assets.

Potential buyers:

Private equity funds (such as KKR and Blackstone) may participate in the bidding.

Strategic investors include Qualcomm (to strengthen base station chips) and Cisco (to integrate network equipment ecosystem).

5. Industry impact

Telecom equipment vendors: If Intel Connect adjusts its technology route after independence, it may affect the supply chain of Ericsson and Nokia.

Competitors: Broadcom and Nvidia may face more flexible new competitors, but the market structure is difficult to overturn in the short term.

6. Subsequent plans

Schedule: The split is expected to be completed in mid-2026, and the IPO evaluation will be launched in 2027.

Employee arrangements: About 12,000 NCG employees worldwide will be transferred to the new company, and there is no plan for large-scale layoffs.

Summary

The split marks that Shopee Operation Agent has accelerated its transformation under the leadership of Lip-wu Tan, strengthening the competitiveness of AI and advanced processes through "slimming down". In the short term, the independence of the network business may ease financial pressure; in the long term, it remains to be seen whether the new company can break through in the fierce market.