July 25 (Reuters) - Intel ( INTC ) is planning to

separate its networking and communications unit into a

stand-alone company and has begun the process of identifying

investors, the chipmaker said on Friday, as new CEO Lip-Bu Tan

looks to streamline its operations.

Tan's plan to rejuvenate the once-iconic chipmaker focuses

on shedding non-core assets and reducing expenses by scaling

back major investments and cutting workforce numbers.

Reuters reported in May that Intel ( INTC ) was

considering

divesting its network and edge businesses, previously

called NEX in its financial reports.

"Like Altera, we will remain an anchor investor enabling

us to benefit from future upside as we position the business for

future growth," the company said in an emailed statement.

In April, Intel ( INTC ) agreed to sell a majority stake in its

Altera programmable chip business to buyout firm Silver Lake at

a valuation of about $8.75 billion, or nearly half of what it

had paid for the business in 2015.

Tan has been given the challenge of revitalizing the

chipmaker after years of missteps and high-capital manufacturing

strategies led to growing losses, all while the company grapples

with establishing a foothold in the burgeoning AI market.

Intel's ( INTC ) shares were

down 9%

on Friday after the chipmaker warned of exiting chip

manufacturing if it failed to secure a major customer. It also

reported

a surprise second-quarter adjusted loss and forecast a

bigger-than-expected loss in the third quarter.

In the latest first quarter, Intel ( INTC ) made NEX a part of

its data center and PC group and does not report its results as

a separate segment.

The unit, which makes chips for telecom equipment,

generated revenue of $5.8 billion in 2024, securities filings

show. That constituted about 11% of the company's total sales.

(Reporting by Arsheeya Bajwa in Bengaluru; Editing by Anil

D'Silva)