Intel Corporation (NASDAQ: INTC) is considering to sell its security business as the semiconductor giant intends to focus on delivering chips for connected devices and cloud computing, based on a news report.
The Security business of Intel Corp. came largely from the tech company’s $7.7 billion acquisition of the software company McAfee. The chip corporation revealed plans to bake some of the security technology into its semiconductor chips in order to make sure of the higher security for its clients.
Intel stated in the month of February in 2011, offering protection for the different connected devices including mobile devices, personal computers, cars, as well as medical gadgets requires a fundamentally new method involving hardware, software, and services. The tech giant mentioned this during its announcement of Intel’s completion of its acquisition deal with McAfee.
According to The Financial Times, the semiconductor company has been in talks with bankers regarding the future of its cybersecurity business for a deal which would be among the largest in the industry. Citing people familiar with the matter, it stated that a group of private equity firms may partner in order to buy Intel’s security business if it will be up for sale at the same or higher price compared to what the chip giant paid for.
Moor Insights & Strategy president and principal analyst Mr. Patrick Moorhead stated, “I could see them selling a piece of the service, but not all security capabilities.”
“Intel has a decent security play right now and security is paramount to the future of IoT,” the president of Moor Insights & Strategy said.
Moorhead further mentioned that, “Hardware-based security is vital to the future of computing.”
An Intel spokeswoman said in an email that the tech giant is refusing to give its statement on the report.
In 2014, Intel Corp rebranded its McAfee cybersecurity business as Intel Security.
The security segment has gained a lot of interest from private equity buyers. Earlier this June, Symantec stated that it was purchasing Web security company Blue Coat for approximately $4.65 billion in cash. The mentioned deal will see Silver Lake—a Symantec investor—increasing its investment in the merged firm. Moreover, the majority stakeholder in Blue Coat, Bain Capital, will reinvest about $750 million through convertible notes.
Intel Corporation said in the month of April that it was reducing 11 percent of its workforce, which is equivalent to 12,000 jobs, by the middle part of the following year as the semiconductor giant tries to expand from chips for personal computers to silicon for data centers and the Internet of Things segment.
As of 6:52 AM GMT -4 on June 27, the INTC stock is changing hands at $31.55, down by 4.36 percent or 1.44. The chip giant’s market capitalization stands at 142.48 billion, while its dividend yield posts at 3.30 percent.