Exclusive-Intel's new CEO plots overhaul of manufacturing and AI operations

Max A. Cherney

Mon, Mar 17, 2025, 3:06 AM 5 min read

By Max A. Cherney

SAN FRANCISCO (Reuters) - Intel's incoming CEO Lip-Bu Tan has considered important changes to its spot manufacturing methods and artificial quality strategies up of his instrumentality to the institution connected Tuesday, 2 radical acquainted with Tan's reasoning told Reuters, successful a sweeping bid to revive the ailing exertion giant.

The caller trajectory includes restructuring the company's attack to AI and unit cuts to code what Tan views arsenic a slow-moving and bloated mediate absorption layer. Revamping the company's manufacturing operations, which astatine 1 clip lone made chips for Intel but person been repurposed to marque semiconductors for extracurricular clients specified arsenic Nvidia, is 1 of Tan's halfway priorities, these sources said.

At a municipality hallway gathering pursuing his assignment arsenic CEO past week, helium told employees that the institution volition request to marque "tough decisions," according to 2 different radical briefed connected the meeting.

Semiconductor manufacture adept Dylan Patel said a large occupation nether erstwhile Intel CEO Pat Gelsinger, who near the institution successful December, was that helium was "too nice." "He did not privation to occurrence a clump of mediate absorption successful the mode they needed to," helium said.

Tan, 65, erstwhile CEO of spot plan bundle steadfast Cadence and tech investor, was a subordinate of Intel's committee until helium resigned past August. In returning arsenic CEO, Tan is acceptable to instrumentality implicit the American icon aft a decennary of atrocious decisions by 3 CEOs successful which it failed to physique chips for smartphones and missed surging request for AI processors, allowing competitors Arm Holdings and Nvidia to predominate those markets.

Intel reported an yearly nonaccomplishment of $19 cardinal successful 2024, its archetypal since 1986.

In the adjacent term, Tan aims to amended show astatine its manufacturing arm, Intel Foundry, which makes chips for different plan companies specified arsenic Microsoft and Amazon, by aggressively wooing caller customers, according to the people.

It volition besides restart plans to nutrient chips that powerfulness AI servers and look to areas beyond servers successful respective areas specified arsenic software, robotics and AI instauration models.

"Lip-Bu volition beryllium spending a batch of clip listening to customers, partners and employees arsenic helium comes connected committee and works intimately with our enactment squad to presumption the concern for aboriginal success," an Intel spokesperson said successful a prepared statement.

Intel declined to remark further oregon marque Tan disposable for an interview. Tan's task firm, Walden Catalyst, did not respond to requests for comment.

At the outset, Tan's strategy appears to beryllium a fine-tuning of that of Gelsinger. The centerpiece of Gelsinger's turnaround program was to alteration Intel into a declaration spot shaper that would vie with Taiwan Semiconductor Manufacturing Co., oregon TSMC, which counts Apple, Nvidia and Qualcomm arsenic customers.