Intek’s new CEO Lip-Bu Tan: Plan to revive the company|

Intel’s new CEO Lip-Bu Tan has decided to overhaul the company’s chip manufacturing methods and artificial intelligence (AI) strategies. Tan, who is returning to the company on Tuesday, is going to make some big changes to make Intel a tech giant again. According to Reuters sources, Tan’s focus will be on restructuring the AI ​​strategy and streamlining the middle management layer.

What will be the new changes?

1. AI Strategy Restructuring: Tan will redefine Intek’s AI approach.
2. Staff Cuts: Middle management will be slimmed down, as Tan believes this layer is slow and bloated.
3. Manufacturing Operations Revamp: Intel’s manufacturing unit, which previously made chips only for Intel, will now make semiconductors for other clients such as Nvidia. This is one of Tan’s core priorities.

Signal of Tough Decisions

In a town hall meeting after becoming CEO, Tan told employees that the company would need to take “tough decisions”. This means that some employees may lose their jobs, and processes will be made more efficient.

Former CEO Pat Gelsinger’s Problem

According to semiconductor industry expert Dylan Patel, former CEO Pat Gelsinger’s (who left the company in December) biggest problem was that he was “too nice”. Patel said, “He didn’t cut middle management as much as was necessary.”

Lip-Bu Tan’s Background

The 65-year-old Tan, who previously served as CEO of chip design software firm Cadence and a tech investor, was a member of Intel’s board. He resigned in August 2023. Now as CEO, Tan will have to take over a company that has lost its dominance over 10 years of big decisions. Intel failed to make chips for smartphones and missed the growing demand for AI processors, as competitors such as Arm Holdings and Nvidia pulled ahead in the marker.

Intek’s Financial Condition

Intel reported an annual loss of $19 billion in 2024, its first loss since 1986.

Business Plan

1 Improve Intel Foundry: Intel plans to connect the Foundry, which makes chips for companies such as Microsoft and Amazon, with more customers.

2 Restart production of AI chips: Plans to make chips for AI servers will be restarted.

3 Focus on Software, Robotics, and AI Models: Intel will now work on software, robotics, and AI foundation models in addition to servers.

Gelsinger vs Tan

Gelsinger had planned to turn Intel into a contract chip manufacturer like TSMC (Taiwan Semiconductor Manufacturing Co), which works for clients like Apple, Nvindia, and Qualcomm. But Merck’s slowdown forced Gelsinger to scale back his plans. Tan, who has been an internal critic of Gelsinger’s execution, will now fine-tune his plans.