The decision comes nearly three months after the departure of former Intel CEO, Pat Gelsinger, who was removed from the position after his ambitious strategy to revive the company failed. However, the new Intel CEO has emphasized that it does not plan to separate its chip design and manufacturing processes.
In a statement to his new subordinate, Lip-Bu Tan emphasized that overcoming Intel’s challenge is his top priority, helping the company recover and become the global leader that it once was. Tan has also reminded them that they are “in many ways” the “founders” of “The New Intel”.
“Together, we will work hard to restore Intel's position as a world-class products company, establish ourselves as a world-class foundry and delight our customers like never before.” – stated Lip-Bu Tan.
Lip-Bu Tan is known for his ability to transform tech companies into powerful industry leaders. During his time as the CEO of Cadence Design Systems for 12 years, he took the company from a mid-tier player to an entire powerhouse, doubling its revenue and boosting its stock by over 3,200%.
At the same time, Tan is also an Intel insider, being part of the company’s board of directors until August 2024, when he resigned due to frustrations with a “bloated workforce” and a sluggish culture.
The new Intel CEO faces a high-stake challenge, as the “New Intel” might very well become the “Last Intel” if the company’s turnaround efforts fail. If Tan doesn’t succeed, it’s uncertain who can step up, making him the best choice to save the company’s future.
After Intel reported a loss of $18.8 billion last year and faced increased competition from Nvidia and AMD, Tan is clear about his vision of the company’s future. His top priority is to streamline operations, cut inefficiency, and refocus the company’s processes.
His first action as the new Intel CEO was writing a letter to the company’s workforce of 100,000 people, promising that he would make Intel an “engineering-focused company”. This transition is expected to be ruthless, and agile, bringing deep layoffs by going beyond the 15,000 cuts already planned for 2024 and potentially hitting between 20-25% of staff.
Tan also inherits the controversial foundry strategy from former Intel CEO, Pat Gelsinger, which aimed to turn the company into a contract manufacturer for other chipmakers, in addition to its own product designs.
The new Intel CEO initially disagreed with this plan, suggesting that there should be a stronger focus on customers. However, he now stated that he will stick with the plan, but refine how it’s executed. This could include ramping up investments in U.S.-based facilities, to gain a competitive advantage over companies like TSMC.
Intel’s stock jumped 12% in after-hours trading on Wednesday, with analysts praising the move as a step toward stabilizing the company.
