Intel Corp. Chief Executive Officer Lip-Bu Tan announced plans to divest non-core assets and develop custom semiconductors to better meet customer needs. This shift aims to realign the company with its mission in a competitive landscape.
During his inaugural address at the Intel Vision conference in Las Vegas, Tan stressed the importance of replacing lost engineering talent, enhancing the company’s financial stability, and refining manufacturing processes to cater to prospective clients. However, he did not specify which segments of Intel he views as non-essential for the company’s future growth.
“We have a lot of hard work ahead,” Tan told a gathering of Intel’s customers. “There are areas where we’ve fallen short of your expectations.”
Tan faces the challenge of revitalizing a company that once led the semiconductor industry but is now lagging behind its competitors in several key areas. A critical issue for Intel’s leadership is determining whether the company’s recovery would be more effective by remaining intact or by separating its product and manufacturing branches.
While Tan did not indicate plans to divest any part of Intel, he underscored the need to address existing issues to improve the performance of both segments. He noted that Intel’s offerings for data centers and AI applications need significant enhancement.
“We fell behind on innovation,” the CEO acknowledged. “We have been too slow to adapt and meet your needs.”
Tan’s appointment in March rekindled some investor interest in Intel, although the stock has since decreased amidst a broader decline in technology shares. Following his presentation, Intel’s stock dipped approximately 1.2 percent in after-hours trading.
Prior to stepping into the CEO role, Tan served on Intel’s board but resigned in August 2024. He explained that his decision to take on this position later in his career stemmed from a deep concern for the company’s struggles. “It was very hard for me to see it struggle,” Tan reflected. “I simply could not stay on the sidelines knowing that I could help.”
His predecessor, Pat Gelsinger, was ousted by the board for not revitalizing Intel’s product line, particularly in relation to developing an AI accelerator chip that could compete with products from Nvidia Corp., a company that has recently surged in revenue and valuation due to the AI boom.
Gelsinger also aimed to transform Intel into a chip foundry capable of manufacturing for external clients; however, that initiative remains in its infancy. Tan emphasized the necessity of consulting with potential outside customers in order to allow them to dictate the design and manufacturing processes of their products, rather than Intel imposing its methods.
He committed to fulfilling the demand for custom parts from large clients, emphasizing that there will be no quick solutions to Intel’s challenges. “It won’t happen overnight, but I know we can get there,” Tan assured.
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