Ericsson Plans to Invest in Intel NEX Spin off Business

According to sources familiar with the matter, Ericsson is in talks to invest in Intel’s Network and Edge (NEX) business. This department produces 5G chips based on x86 architecture, and Intel will maintain its anchor investor status after announcing the spin off. Several analysts have told Fierce Network that Ericsson is not the only vendor interested in this business.

Investment model attracts attention

J. Jack Gold, President of Gold Associates, pointed out that Ericsson and Intel have previously collaborated on developing custom chips, so there is a common interest in ensuring the survival of NEX business. Whether Ericsson will acquire NEX is still unknown. Compared to a wholly-owned acquisition, it is more likely to adopt a joint investment model with Intel. In his analysis, he emphasized that any direct acquirer needs to obtain Intel’s x86 architecture authorization, “by establishing a joint venture in which Intel participates, this restriction can be avoided, and product performance can be guaranteed with the help of Intel wafer fabs.

Recon Analytics analyst Daryl Schoolar added that Ericsson has a “deep partnership” with Intel, and its virtualized wireless access network (vRAN) and customized products both use Intel chips. Ericsson’s investment in NEX is commercially reasonable, but it needs to be controlled by Intel or Zhongfang to avoid the loss of other customers. “

Roy Chua, the head of AvidThink, believes that “it is not yet certain whether Ericsson will compete for controlling stake, which may be aimed at maintaining its vRAN/cRAN technology capabilities. There are actually alternative solutions that do not rely on huge shareholdings. He also pointed out that Ericsson can choose to cooperate with AMD, switch to ARM solutions from companies such as Nvidia, or increase investment in dedicated chips (ASICs) – but the latter two paths require a lot of time and money for system reconstruction.

Potential bidders emerge

Analyst Jack Gold revealed that Nokia and Samsung will inevitably evaluate the impact of this matter on their product lines and may eventually join Intel led NEX spin off investment plan. He cited Intel’s historical case and said, ‘Similar to the way Altera and Mobileye handled it back then, Intel will retain partial ownership and recover the investment in a future IPO.’. “

It is worth noting that Intel explicitly stated in its spin off statement that the NEX business will continue to serve its existing customer base, including Dell, HP Enterprise, Lenovo, and Cisco. Analysts generally believe that if a telecommunications equipment provider controls NEX, it may raise concerns among other customers about supply chain fairness.

Up to now, neither Ericsson nor Intel has commented on the details of the negotiations. A Nokia spokesperson responded by stating that they continue to monitor changes in the industry ecosystem, while Samsung declined to comment. According to Bloomberg’s previous report, the valuation of NEX’s business may be in the $3 billion range, and the final transaction structure is expected to be finalized in the fourth quarter of 2025.