Discharged Intel Leader Warns of Extreme Measures
Rebranding "Tough Choices" - Intel's fresh slate under Tan's leadership
The soon-to-be reigning Intel CEO, Lip-Bu Tan, is eyeing a radical makeover for the beleaguered chipmaker even before he takes the reins on March 18. Insiders reveal Tan's ambitions include a shake-up of the company's AI strategy, streamlined semiconductor manufacturing, and potential job cuts in management levels. This news has stirred excitement among investors.
According to multiple sources, Tan intends to slash middle-management roles, viewing the department as excessively oversized. At a recent staff meeting, Tan candidly warned that the company faces challenging times ahead, yet Intel remains tight-lipped about this matter, refusing to comment or grant interviews. Tan's venture capital firm, Walden Catalyst, has also yet to respond to inquiries.
Investors enthusiastically applaud the restructuring plans. Intel's stock prices soared by over 1% in pre-market trading on Wall Street, extending the 16% surge from last week when Tan's appointment was announced.
Analyst Dylan Patel, founder of SemiAnalysis, voices support for the prospective job cuts. He accuses Intel's previous CEO, Pat Gelsinger, of being too accommodating, failing to trim excess middle management staff as required. Gelsinger had unveiled a multibillion-dollar restructuring plan in August, resulting in about one in six positions being eliminated across the company.
Chasing the AI trend
Tan also seeks to court clients for Intel's foundry business aggressively. Moreover, he aims to reinstate the production of high-performance processors for artificial intelligence (AI). AI experts, however, anticipate that it will take at least until 2027 to develop a competitive chip.
Intel is currently far behind market leader Nvidia in high-margin AI processors for servers and technologically inferior to Taiwanese rival TSMC in foundry manufacturing. The new production technology "18A" is expected to be a game-changer, but implementation has been delayed due to issues.
Missed opportunities and uncertain prospects
At first glance, Gelsinger's turnaround plans seem only slightly different from those proposed by his predecessor Bob Swan. Like Gelsinger, Swan planned to significantly expand contract manufacturing, buthosted projects like the Magdeburg factory construction were postponed due to substantial financial losses. Intel is now regarded as a potential takeover target. Towards the end of 2023, Swan was tasked with assessing the contract manufacturing situation. However, his reform proposals were never enacted, leading to his departure from the committee in the following year.
Source: ntv.de, jki/rts
- Artificial Intelligence
- Intel
- Semiconductor Manufacturer
Background:
Under Tan's leadership, Intel plans to revamp its AI capabilities, focusing on chip production for AI applications. This strategy includes streamlining operations, modernizing manufacturing processes, courting significant clients such as Microsoft and Amazon, and potentially cutting jobs to foster a leaner and more agile organization. In addition to this, the company intends to target areas like application-specific integrated circuits (ASICs) for emerging workloads like large language models and quantum computing hardware. Furthermore, Intel aims to intensify its competition with industry leaders by adopting advanced technologies and investing in AI research and development.
[1] DeepMind's energy-efficient AI model
[2] Neuromorphic computing
[3] Intel's restructuring plans
[4] Competition in the AI hardware market
- CEO Lip-Bu Tan, in Intel's forthcoming semianalysis, aims to revise the community policy, specifically focusing on Intel's employment policy, by streamlining operations and modernizing manufacturing processes for AI applications.
- As part of the rebranding strategy, Intel plans to reinforce its position in the AI market, courting clients such as Microsoft and Amazon, while also considering potential job cuts to foster a leaner and more agile organization.
- Furthermore, Intel intends to target areas like application-specific integrated circuits (ASICs) for emerging workloads like large language models and quantum computing hardware, thereby intensifying competition with industry leaders.
