New Intel CEO to overhaul AI and manufacturing: Reuters
Make us a preferred source
Make us a preferred source on Google
The news: Incoming Intel CEO Lip-Bu Tan is mulling plans to overhaul the company’s chip manufacturing and artificial intelligence strategies, according to sources cited by Reuters.
The numbers: Intel reported an annual loss of USD19 billion ($15.7 billion) in 2024, its first since 1986.
The context: At a company-wide town hall meeting last week following his appointment as CEO, Tan said that the company will need to make “tough decisions” which include staff cuts to remove what Tan has previously referred to as a slow-moving and bloated middle management.
Tan will also prioritise improving Intel’s manufacturing operations, which are currently being repurposed to make semiconductors for clients including Nvidia.
Sources told Reuters that in the short term, Tan plans to improve performance at its manufacturing arm, Intel Foundry, which makes chips for other design companies such as Microsoft and Amazon, by aggressively courting new customers.
Under Tan, Intel will also restart plans to produce chips that power AI servers and look to areas beyond servers in several areas such as software, robotics and AI foundation models.
Intel is struggling with market-share losses, manufacturing setbacks and a steep earnings decline. The company is investing heavily to become a contract chip manufacturer, but the effort has yet to secure major customers.
Tan left Intel’s board last year, reportedly due to disagreements over the company’s turnaround strategy under former CEO Pat Gelsinger, criticising middle management and that its chip contract manufacturing effort was not sufficiently customer-centric. Chip giants Qualcomm, Broadcom and Arm have reportedly explored buying all or part of Intel, leaving the new CEO to decide whether to fend off potential suitors or rethink the company’s structure.
The source: Reuters
