Intel’s incoming CEO, Lip-Bu Tan, has thought-about vital adjustments to its chip manufacturing strategies and synthetic intelligence methods forward of his return to the corporate on Tuesday, two individuals conversant in Tan’s considering mentioned, in a sweeping bid to revive the ailing know-how big.
The brand new trajectory contains restructuring the corporate’s strategy to AI and employees cuts to handle what Tan views as a slow-moving and bloated center administration layer. Revamping the corporate’s manufacturing operations, which at one time solely made chips for Intel however have been repurposed to make semiconductors for outdoor purchasers corresponding to Nvidia, is one in all Tan’s core priorities, these sources mentioned.
At a city corridor assembly following his appointment as CEO final week, he informed staff that the corporate might want to make “powerful selections”, in keeping with two different individuals briefed on the assembly.
Semiconductor business skilled Dylan Patel mentioned a giant drawback underneath former Intel CEO Pat Gelsinger, who left the corporate in December, was that he was “too good” and “didn’t need to hearth a bunch of center administration in the way in which they wanted to”.
Tan, 65, former CEO of chip design software program agency Cadence and a tech investor, was a member of Intel’s board till he resigned final August. In returning as CEO, Tan is ready to take over the American icon after a decade of unhealthy selections by three CEOs during which it did not construct chips for smartphones and missed surging demand for AI processors, permitting opponents ARM Holdings and Nvidia to dominate these markets.
Intel reported an annual lack of US$19-billion in 2024, its first since 1986.
Foundry enterprise
Within the close to time period, Tan goals to enhance efficiency at its manufacturing arm, Intel Foundry, which makes chips for different design firms corresponding to Microsoft and Amazon, by aggressively wooing new clients, in keeping with the individuals.
It’ll additionally restart plans to supply chips that energy AI servers and look to areas past servers in a number of areas corresponding to software program, robotics and AI basis fashions.
“Lip-Bu will probably be spending plenty of time listening to clients, companions and staff as he comes on board and works carefully with our management crew to place the enterprise for future success,” an Intel spokesman mentioned in a ready assertion.
Learn: New Intel CEO Lip-Bu Tan has a historical past as a profitable underdog
Intel declined to remark additional or make Tan obtainable for an interview. Tan’s enterprise agency, Walden Catalyst, didn’t reply to requests for remark.
On the outset, Tan’s technique seems to be a fine-tuning of that of Gelsinger. The centrepiece of Gelsinger’s turnaround plan was to remodel Intel right into a contract chip producer that might compete with Taiwan’s TSMC, which counts Apple, Nvidia and Qualcomm as clients.
Gelsinger dedicated tens of billions of {dollars} to construct factories within the US and Europe to make chips for each Intel and for outdoor clients, however he was compelled to reduce these ambitions as the marketplace for Intel’s core merchandise cooled.
Tan has been a vocal inside critic of Gelsinger’s execution, in keeping with the 2 sources conversant in Tan’s plans.
For many of its historical past, Intel has manufactured chips for just one consumer: itself. When Gelsinger turned CEO in 2021, he prioritised manufacturing chips for others however fell in need of offering the extent of buyer and technical service as rival TSMC, resulting in delays and failed exams, former executives have mentioned.
Tan’s views had been formed by months of reviewing Intel’s manufacturing course of after the board in late 2023 appointed him to a particular function overseeing it, in keeping with a regulatory submitting.
In his evaluation, he expressed frustration with the corporate’s tradition, sources mentioned, saying it had misplaced the “solely the paranoid survive” ethos enshrined by former CEO Andy Grove. He additionally got here to consider that call making was slowed down by a bloated workforce.
Tan offered a few of his concepts to Intel’s board final 12 months, however they declined to place them into place, in keeping with two individuals conversant in the matter. By August, Tan abruptly resigned over variations with the board.
When he returns as CEO this week, he’ll lay contemporary eyes on Intel’s workforce, which was slashed by roughly 15 000 to nearly 109 000 on the finish of final 12 months, the sources mentioned.
Panther Lake
Past the cuts, Tan has little selection however to make Intel’s current manufacturing operation work within the quick run. Intel’s subsequent technology of superior chips outfitted with AI options, referred to as Panther Lake, will depend upon its in-house factories utilizing a brand new set of methods and applied sciences Intel calls “18A”. Intel’s monetary success this 12 months is tied to sturdy gross sales of the forthcoming chip.
Tan signalled in a memo Intel printed Wednesday that he plans to maintain management over the factories, which stay financially and operationally separate from the design enterprise and restore Intel’s place as a “world-class foundry”.
Learn: TSMC eyes JV to run Intel’s foundry operations
Intel’s contract manufacturing operation can succeed if Tan wins over at the least two massive clients to supply a excessive quantity of chips, business analysts and Intel executives mentioned.
A part of the hassle to lure massive clients will contain enhancing Intel’s chip manufacturing course of to make it simpler for potential clients like Nvidia and Google to make use of.
Intel has demonstrated enhancements in its manufacturing processes in current weeks and has attracted curiosity from Nvidia and Broadcom which have launched early take a look at runs. AMD can be evaluating Intel’s course of.
Tan is anticipated to work on methods to enhance output or “yield” to ship larger numbers of chips printed on every silicon wafer as they transfer to quantity manufacturing of its first in-house chip utilizing the so-called 18A course of this 12 months.
The objective is to maneuver to an annual launch schedule of AI chips, just like Nvidia, however that can take years. It is going to be at the least 2027 earlier than Intel can develop a compelling new structure for a primary AI chip, in keeping with three business sources, and one particular person conversant in Intel’s progress. — Max A Cherney, (c) 2025 Reuters
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