Ericsson in talks to invest in Intel NEX
Telecom equipment maker (TEM) Ericsson is in talks to invest hundreds of millions of dollars in Intel Corp.’s networking infrastructure business, according to people familiar with the matter.
The investment would make Ericsson a minority stakeholder in the newly spun-off networking and edge business known as NEX that has long supplied chips to Ericsson for its radio access network hardware.
Intel has previously stated it had begun the process of identifying strategic investors. When it comes to funding companies, "strategic investor" means a customer or possibly another fellow traveler. Because Intel is Ericsson's prime supplier for digital chips for 5G RAN and core systems, the Swedish TEM is an unsurprising strategic investor. Intel's poor execution screwed competing TEMs (e.g., Nokia), leading them to abandon the erstwhile semiconductor powerhouse.
Having been a ride or die Intel partner, Ericsson would remain loyal by making such an investment. Can any price concessions (or the equivalent) it gets from investing outweigh the risks of sticking with Intel? Comment below.
