Intel’s new CEO will first bring order to AI chips and contract manufacturing

Intel CEO Lip-Bu Tan, who takes over this week, is hardly a newcomer to the company’s management, having already spent two years on the board. According to some reports, his first priority as Intel CEO will be to clean up contract chip manufacturing and artificial intelligence.

Image Source: Intel

This was reported by Reuters, citing its own sources familiar with the plans of the new head of the processor giant. Lip-Bu Tan has already spoken at a general meeting of Intel employees, admitting that the company will have to make a number of difficult decisions. It is expected that in order to increase the flexibility of the management structure and the speed of decision implementation, the new CEO will reduce some of the middle management, which adds inertia to all management processes. The predecessor, Patrick Gelsinger, according to some outside experts, was softer in personnel matters, since he spent a significant part of his career at Intel.

Lip-Bu Thane is rumored to be determined to attract new customers to Intel’s Foundry contract division, and will be aggressive in this area. Under the new CEO, Intel will also try to make up for lost time in the accelerator business. At the same time, the new head is ready to listen carefully not only to customers and partners, but also to Intel employees.

In essence, Lip-Bu Tan is determined to correct the mistakes made by his predecessor. Although Gelsinger sought to develop Intel’s manufacturing infrastructure with an eye on attracting third-party orders for the production of chips, he did not manage to gain significant trust from new customers. They were wary of Intel’s not very smooth history of operations with numerous delays in the release of new products or their complete cancellation.

Lip-Bu Tan, while analyzing Intel’s weaknesses in its current state, came to the conclusion that the company’s culture had lost the spirit of its founder, and that decision-making was hampered by an overstaffed staff. He shared his thoughts with the board of directors last year, but they did not find understanding, after which he decided to leave the company by August. Upon his return in a new capacity, Lip-Bu Tan made it clear that he intends to retain Intel’s manufacturing capabilities and turn it into a “world-class contract manufacturer.” According to preliminary estimates, Intel’s efforts in this area will pay off if the company gains at least two major chip developers as its loyal customers. To do this, Intel’s chip manufacturing technologies will need to be adapted to their needs.

Intel would also ideally like to move to the annual release of new generations of its own chips for computing accelerators, as Nvidia is currently doing with the support of TSMC. However, Intel will spend at least until 2027 to prepare for the release of the first generation of current computing accelerators, so there is no reason to count on a quick rematch in this area, as experts explain.