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Intel (NASDAQ:INTC) is shaking things up with a bold new approach under incoming CEO Lip-Bu Tan. After a rough patch and a $19 billion loss in 2024, Tan is back to lead the charge, bringing his years of experience in chip design and tech investing. His mission? Overhaul Intel's chip manufacturing processes and AI strategy. He's eyeing significant restructuring, starting with cutting through Intel's bloated middle management and shifting gears on how the company handles its manufacturing, especially its Foundry business that serves major clients like Microsoft (NASDAQ:MSFT) and Amazon (NASDAQ:AMZN). Tan's goal is clear: turn Intel into a top-tier foundry with the same competitive edge as rivals like Taiwan Semiconductor Manufacturing Company (NYSE:TSM).
Tan's focus on AI and operational efficiency comes as Intel faces mounting pressure to regain its position in the semiconductor race. With a fresh eye on Intel's massive workforce and manufacturing capabilities, Tan is pushing hard to improve chip yields and attract new customers, including key players like Nvidia (NASDAQ:NVDA). Intel's shift to advanced AI chips, leveraging new tech like the "18A" process, is poised to put the company back in the game. It's clear that Tan isn't just tweaking the old strategy; he's looking for a full-on reset with a focus on AI and next-gen chip tech.
Intel's path to recovery will be about more than just cutting costs; it's about winning back customer trust and proving that its chips can compete with the best. Tan's leadership is a gamble, but if he pulls it off, Intel could see its manufacturing operations humming along with major clients coming on board for its next-gen AI products. This could be the start of something big for Intel, but investors should stay tuned to see if Tan's plan can deliver the goods.
This article first appeared on GuruFocus.