Intel will axe communication units, report claims


— 3:47 AM on June 5, 2006

Intel is going to cut its losses by putting a number of its communications units up for sale, according to a report by the San Jose Mercury News. This sale would be part of Intel's announced restructuring plans, which the company said in April would involve an examination of "non-performing businesses." The initiative already saw Intel streamline its NOR flash unit in May, and rumor has it the company also plans to cut 16,000 jobs later this month. According to "sources who have seen details of the plans," Intel's communications units pending a sell-off include:

• Intel's communications processor business, including the IXP network processor and communications processor families for communications gear. That business generated approximately $150 million in revenue for 2005, according to sources who have seen documents describing the business.

• Intel's Xscale business, which includes applications processors for cell phones and chips for BlackBerrys, smart cell phones, handheld computers and portable media players. That business generated approximately $250 million in sales last year, according to sources who saw documents on the business.

Other units are also said to be on offer "for the right price." These businesses represent some of Intel's past diversification attempts, on which the company is said to have spent over $10 billion in the past ten years. However, the units are now losing money and no longer have their former value. The Mercury News suggests Intel's Itanium processor division could be next in line for cuts, considering it, too, is one of the many factors behind the company's recent financial woes.
   
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