Intel’s New CEO Ready to Turn Company into Major Contract Chipmaker

With Intel’s new permanent CEO, investors are pinning some hopes on a way out of the crisis, but one direction of management policy will remain unchanged under the new leadership. Lip-Bu Tan has made it clear that he is maintaining his goal of turning Intel into a major contract chipmaker.

Image Source: Intel

«We will work to restore Intel’s position as a world-class product company, transform it into a world-class contract manufacturer, and meet the needs of customers in a way that has never been done before,” the new Intel CEO said in a message to its employees. This is exactly what the current moment requires from the corporation’s management, according to its new head.

In essence, such statements by Lip-Bu Tan do not clarify Intel’s strategy for further separation of production assets and the business related to processor development. From the point of view of stock investors, such uncertainty will contribute to stagnation of the company’s stock price, and as soon as some clarity appears, the securities will react accordingly. As is known, the previous Intel CEO Patrick Gelsinger was against the separation of the company’s business on this basis. At the same time, Gelsinger’s appetite for increasing Intel’s production capacity clearly did not correspond to the potential financial return, and this became the reason for his resignation due to contradictions with the board of directors.

The situation is further complicated by Donald Trump’s criticism of the Chip Act. If the subsidy program is scrapped, Intel could lose much of its government support for building its new factories. Lip-Bu Tan outlined his plans for the future only in general terms: “We will learn from our past mistakes, use our misdeeds to strengthen our resolve, and choose action over confusion to realize our full potential.”