Intel’s new CEO Lip-Bu Tan is set to make significant changes to the company’s chip manufacturing methods and artificial intelligence strategies as part of his bid to revive the ailing technology giant.
Tan, who returns as CEO on Tuesday, aims to improve efficiency and revive Intel’s manufacturing prowess. He plans to revamp the company’s approach to AI and staff cuts to address what he views as a slow-moving and bloated middle management layer.
Revamping the company’s manufacturing operations is one of Tan’s core priorities. The new trajectory includes restructuring the company’s approach to AI, which at one time only made chips for Intel but have been repurposed to make semiconductors for outside clients such as Nvidia.
Tan has expressed frustration with the company’s culture and decision-making process, citing a bloated workforce and lost focus on innovation. He plans to improve performance at Intel Foundry, which makes chips for other design companies, by aggressively wooing new customers.
The new CEO also aims to 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. The goal is to move to an annual release schedule of AI chips, similar to Nvidia.
Tan’s strategy appears to be a fine-tuning of former CEO Pat Gelsinger’s turnaround plan, which aimed to transform Intel into a contract chip manufacturer. However, Tan has been critical of Gelsinger’s execution, citing a lack of customer and technical service as rival TSMC.
The plans are still being formulated, but sources say that Tan will lay fresh eyes on Intel’s workforce, which was slashed by roughly 15,000 to almost 109,000 at the end of last year. The new CEO will focus on improving output or “yield” to deliver higher numbers of chips printed on each silicon wafer as they move to volume manufacturing of its first in-house chip using the so-called 18A process this year.
With strong sales of Intel’s forthcoming chip tied to its financial success, Tan has little choice but to make Intel’s existing manufacturing operation work in the short run. Industry analysts and Intel executives predict that winning over at least two large customers will be key to the contract manufacturing operation succeeding.
Source: https://www.reuters.com/technology/intels-new-ceo-plots-overhaul-manufacturing-ai-operations-2025-03-17