At Intel, Everything's Considered on the Table

Big changes are afoot at the world's No. 1 chipmaker. With its market share and revenue under siege, Intel(INTC Quote) is on a mission to trim excess fat and regain its competitive form.

CEO Paul Otellini will have no shortage of candidates to cut as he embarks on what is expected to be the company's most radical reorganization in two decades: In addition to making the microprocessors that power three out of every four personal computers, Intel makes chips in products from cell phones to DVD players to telecommunications gear.

According to recent reports, Intel has quietly put some of its communications and mobile-applications processor businesses up for sale. Recent organizational changes in the flash memory division, which had a $154 million operating loss in 2005, have prompted speculation that Intel is readying the business for a spinoff.

Many of Intel's tangential chip businesses are believed to be subsidized by the flagship microprocessor business.

But they are also considered important assets in a technology universe where the center of gravity is increasingly drifting away from the PC, leaving Intel in a difficult position as it strives to ensure its future competitiveness.

Intel is facing two problems, says semiconductor analyst Nathan Brookwood of Insight 64. "No. 1, these businesses haven't caught on, so [Intel has] to decide whether they want to continue to pursue them."

And if Intel does choose to shed some of its peripheral chip businesses, Brookwood says, what will the company do to restore its growth in a maturing PC market?

The company says it will likely provide an update on the restructuring process during the quarterly earnings report in July but declined to comment on "speculative" news reports about certain businesses being for sale.

"Everything is on the table," says spokesman Chuck Mulloy. "There are no preconceived outcomes of this effort."