Intel’s new CEO Lip-Bu Tan wants to revamp – Business News
Intel’s incoming chief government plans to revamp the embattled tech giant’s chipmaking operations and slash jobs to higher compete with industry rivals, in accordance to a report.
Lip-Bu Tan, a former Intel board member who takes over Tuesday, might be targeted on streamlining Intel’s manufacturing course of to churn out more AI chips for purchasers like Nvidia, sources with data of his pondering advised Reuters.
His plans additionally embody employees cuts to the firm’s bloated middle-management layer, which he has argued slows down Intel’s decision-making course of, the report mentioned.
Lip-Bu Tan, Intel’s incoming chief government, plans to revamp the firm’s chipmaking operations and execute potential job cuts, in accordance to a report.
Intel didn’t instantly reply to The Post’s request for remark.
Intel rose 6.6% Monday morning.
After Intel introduced Tan’s appointment final week, he advised workers at a city corridor assembly that the company will need to make “tough decisions,” in accordance to sources briefed on the assembly.
Tan takes the reins from Pat Gelsinger, who was pushed out in December after three years on the helm.
One criticism of Gelsinger was that he was “too nice,” in accordance to semiconductor industry knowledgeable Dylan Patel.
“He did not want to fire a bunch of middle management in the way they needed to,” Patel mentioned.
Keep up with right now’s most important information
Stay up on the very newest with Evening Update.
Thanks for signing up!
Gelsinger did announce final August that the chipmaker would slash 15% of its huge workforce — about 15,000 jobs.
Tan, 65, the previous chief government of chip design software program firm Cadence and the pinnacle of a enterprise capital firm, seems prepared to shake issues up even additional after months of disappointing earnings.
The flailing company reported an annual loss of $19 billion in 2024 – its first since 1986 because it struggled to compete with main semiconductor rivals like AMD, TSMC and Samsung.
Intel reported an annual loss of $19 billion in 2024 — its first since 1986 because it struggled to compete with main semiconductor rivals. Dmitry – stock.adobe.com
Intel missed out on the demand surge for AI processors, dropping market share to Nvidia, because it initially solely produced chips for itself. The company has since pivoted to manufacturing chips for patrons.
Tan wants to improve efficiency throughout Intel Foundry, the firm’s manufacturing arm that produces chips for Microsoft and Amazon, by aggressively wooing new clients, sources mentioned.
The company can even restart plans to produce chips that may energy AI servers, and look to future developments in software program and robotics, in accordance to the report.
Lip-Bu Tan wants to improve efficiency throughout Intel Foundry, the firm’s manufacturing arm, in accordance to the report. REUTERS
Gelsinger had beforehand unveiled a turnaround plan that sought to rework the company into a booming contract chip producer that would tackle TSMC.
The former CEO pledged tens of billions of {dollars} to construct factories within the US and Europe to increase chip manufacturing, however was pressured to scale back these plans amid a hunch in demand.
The struggling company was one of the primary to obtain funding from former President Joe Biden CHIPS Act, receiving $2.2 billion in federal grants earlier this yr.
Last month, President Trump vowed to repeal the CHIPS Act.
As a board member, Tan was a vocal critic of Gelsinger, who failed to present customer support on the identical degree as rival TSMC, sources mentioned.
Tan argued that Intel’s work tradition had misplaced the “only the paranoid survive” ethos put in place by Andy Grove, who served because the firm’s chief government within the late Eighties to late Nineties, in accordance to sources.
After months of reviewing Intel’s manufacturing course of in a particular position, Tan introduced some of his concepts to the company’s board final yr, however they declined to pursue them, in accordance to sources.
He abruptly resigned from the board in August.
Lip-Bu Tan (above) was a vocal critic of former CEO Pat Gelsinger during his time on the board. AFP through Getty Images
Now, Tan is anticipated to give attention to methods to improve Intel’s output so it will possibly ship more chips as it really works towards producing its first in-house chip someday this yr.
Intel is unlikely to produce a new AI chip till not less than 2027, industry sources and a individual conversant in Intel’s progress mentioned.
He can even be taking up the company quickly after its workforce was slashed by about 15,000 to round 109,000 on the finish of final yr.
With Post wires
