INTEL’S incoming Malaysian-born CEO, Lip-Bu Tan, is reportedly planning significant changes to the company’s chip manufacturing and AI strategies.
Two people familiar with Tan’s thinking have indicated that these changes aim to revive the struggling technology giant.
Tan’s strategy includes restructuring Intel’s AI approach and implementing staff cuts to address what he views as a slow-moving and bloated middle management layer.
Revamping manufacturing operations, which now produce semiconductors for clients like Nvidia, is a core priority.
At a recent town hall meeting, Tan told employees that “tough decisions” would be necessary.
Industry expert Dylan Patel noted that former CEO Pat Gelsinger was too reluctant to cut middle management.
Tan, who previously served on Intel’s board, is set to take over after a decade of poor decisions that allowed competitors like Arm Holdings and Nvidia to dominate the AI and smartphone markets. Intel reported a $19 billion loss in 2024, its first since 1986.
Tan aims to improve Intel Foundry’s performance by aggressively pursuing new customers and restarting plans for AI server chips. His approach is seen as a refinement of Gelsinger’s plan to transform Intel into a contract chip manufacturer competing with Taiwan Semiconductor Manufacturing Co. (TSMC).
Tan has been critical of Gelsinger’s execution and believes Intel’s culture has lost its competitive edge. He presented his ideas to the board last year but they were not implemented, leading to his resignation. Upon his return, Tan will reassess Intel’s workforce and focus on making the existing manufacturing operations work.
Tan’s success will depend on securing large customers and improving manufacturing processes. Intel has shown recent improvements and attracted interest from Nvidia and Broadcom. The goal is to adopt an annual AI chip release schedule, but this is expected to take several years.
-BTS Media
