Intel’s new CEO Lip-Bu Tan has weighed major overhauls of its chip-making processes and artificial intelligence plans before returning to the company on Tuesday, two individuals close to Tan’s thought process said to Reuters, in a broad effort to revive the struggling technology giant.
Intel’s new CEO Lip-Bu Tan has weighed major changes in its semiconductor fabrication techniques and artificial intelligence strategy prior to returning to the firm on Tuesday, according to two sources close to Tan’s considerations, in an ambitious attempt to save the troubled tech giant.
The new direction encompasses reorganizing the company’s strategy towards AI and layoffs to tackle what Tan sees as a sluggish, bureaucratic middle tier of management. Overhauling the company’s chip manufacturing operations, which once produced solely chips for Intel but have been retooled to produce semiconductors for third-party customers like Nvidia, is among Tan’s top priorities, these people said.
During a town hall meeting after his appointment as CEO last week, he informed employees that the company will have to make “tough decisions,” two other individuals briefed on the meeting stated.
Semiconductor industry analyst Dylan Patel said one of the major issues under previous Intel CEO Pat Gelsinger, who departed the company in December, was that he was “too nice.” “He did not want to lay off a bunch of middle management in the way they needed to,” he said.
Tan, 65, ex-CEO of chip design software company Cadence and technology investor, was on Intel’s board until he stepped down last August. By coming back in as CEO, Tan will inherit the American icon following a decade of poor choices by three CEOs during which it missed opportunities to produce chips for smartphones and failed to capture roiling demand for AI processors, leaving rivals Arm Holdings and Nvidia, opens a new tab to take control of those markets.
Intel, opens new tab posted an annual loss of $19 billion in 2024, the first since 1986. In the near future, Tan hopes to restore profitability at its chip-making subsidiary, Intel Foundry, that produces chips for other design houses like Microsoft, opens new tab and Amazon, opens new tab, by pursuing new customers aggressively, the people said. It will also resume efforts to make chips that drive AI servers and seek opportunities outside of servers in a number of domains like software, robotics and AI foundation models.
