Intel Offloads Silicon Photonics Product Line To Jabil

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The move, part of a long-term plan to focus on core chip-making technology that has seen at least 10 divestitures in the last 2.5 years, will send Intel’s current silicon photonics module business and customers along with future development of the technology to electronics manufacturing services company Jabil.

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Intel is continuing on its strategy of divesting its non-core businesses, this time with an agreement with electronics manufacturing services company to take over the manufacture and sale of the silicon photonics-based pluggable optical transceiver product line from Intel.

St. Petersburg, Fla.-based Jabil, which counts among its customers such IT-focused companies as Nvidia, NetApp, Arista, IBM, Dell, Cisco, Meta, Intel, and Apple, is also taking over future development of those modules as well.

The value of the deal was not disclosed.

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The move by Intel to sell its silicon photonics optical transceiver product line to Jabil is the third such divestiture Intel has done recently, and the tenth business it has exited in two and a half years.

Intel earlier this month said it will turn its programmable chip group into a standalone business that will go public by 2026. That business was formed by Intel’s $16.7-billion acquisition of Altera in 2015.

Intel management Friday originally said during its fiscal third quarter 2023 quarterly financial conference call that it had divested the silicon photonics pluggable transceiver business, but did not discuss the name of the buyer.

“In addition, in Q3, we made the decision to divest the pluggable module portion of our silicon photonics business, allowing us to focus on the higher value component business and optical I/O solutions to enable AI infrastructure scaling. This marks the 10th business we have exited in the last two and a half years generating $1.8 billion in annual savings and a testament to our efforts to optimize our portfolio and drive long term value creation,” said Intel CEO Pat Gelsinger during his prepared remarks on the call.

Intel in July unveiled plans to exit its NUC mini PC business and license the NUC designs to computer maker Asus. Asus in September started selling NUC PCs.

Intel did not respond to a CRN request for further information.

A Jabil spokesperson told CRN via email that, with the deal, Jabil will be the primary supplier of the current silicon photonics-based pluggable optical transceiver (“module”) product lines, and will assume development of future module generations. Future products will continue to use Intel‘s silicon photonics technology, and their brand over the next six months will transition to Jabil.

The deal represents a strategic expansion of Jabil’s presence in the photonics space, bringing the company skills and scale critical to support the networking needs driven by AI and the continued migration of workloads to the cloud, the spokesperson said. The deal and related activities will result in an expanded physical footprint and engineering and product capabilities to support the evolving demands of the data center and telecommunications ecosystems, the spokesperson said.

For Jabil, the new deal with Intel will help it better serve the needs of its data center customers, including companies in the hyperscale cloud, next-generation cloud, and AI cloud data center businesses, said Matt Crowley, Jabil’s senior vice president of cloud and enterprise infrastructure in a prepared statement.

“These complex environments present unique challenges, and we are committed to tackling them head-on and delivering innovative solutions to support the evolving demands of the data center ecosystem. This deal enables Jabil to expand its presence in the data center value chain,” Crowley said in the statement.

Intel Senior Vice President and Chief Strategy Officer Safroadu Yeboah-Amankwah, in a prepared statement, said, “We are pleased to reach this agreement with a world-class supplier like Jabil. We look forward to working closely with Jabil, our customers, and our suppliers to enable a seamless transition as Intel shifts its focus to silicon photonics components for existing markets and emerging applications.”

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