Intel's incoming CEO Lip-Bu Tan has considered significant changes to its chip manufacturing methods and artificial intelligence strategies ahead of his return to the company on Tuesday, two people familiar with Tan's thinking said, in a sweeping bid to revive the ailing technology giant.
The new trajectory includes restructuring the company's approach to AI and staff cuts to address what Tan views as a slow-moving and bloated middle management layer. Revamping the company's manufacturing operations, which at one time only made chips for Intel but have been repurposed to make semiconductors for outside clients such as Nvidia, is one of Tan's core priorities, these sources said. The plans are still being formulated and could yet change, these sources said. Intel shares rose more than 8% in mid-day trading on Nasdaq. At a town hall meeting following his appointment as CEO last week, he told employees that the company will need to make "tough decisions," according to two other people briefed on the meeting.
Semiconductor industry expert Dylan Patel said a big problem under former Intel CEO Pat Gelsinger, who left the company in December, was that he was "too nice." "He did not want to fire a bunch of middle management in the way they needed to," he said. Tan, 65, former CEO of chip design software firm Cadence and tech investor, was a member of Intel's board until he resigned last August. In returning as CEO, Tan is set to take over the American icon after a decade of bad decisions by three CEOs in which it failed to build chips for smartphones and missed surging demand for AI processors, allowing competitors Arm Holdings and Nvidia to dominate those markets.
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