Intel's New CEO: "Will Revive Foundry... Layoffs of Staff Who Lost Their 'Obsessive' Spirit"

Hints at Independent Survival of Foundry Business
Middle Management Layoffs Announced

The new CEO of the American semiconductor company Intel is attempting a revival by securing customers for its foundry business. Amid U.S. government pressure, Taiwan's TSMC is considering acquiring Intel's foundry business, and depending on the new CEO's strategy, significant impacts on the semiconductor industry are expected. A large-scale restructuring has also been announced to this end.

Lip-bu Tan Intel CEO

According to U.S. information technology media such as TechCrunch on the 17th (local time), Lip-Bu Tan, Intel's new CEO, revealed his management policy at a town hall meeting with employees last week ahead of his official inauguration on the 18th. He reportedly mentioned that "difficult decisions will have to be made" at this event.

CEO Tan's goal is focused on rebuilding the foundry business and launching an offensive in the artificial intelligence (AI) field. These two areas have been weak points for Intel compared to its competitors. Under former CEO Pat Gelsinger's leadership, Intel invested massive funds into the foundry business, but this turned out to be a boomerang that constrained the company.

Gelsinger claimed that Intel would surpass Samsung Electronics to become the second-largest player in the foundry industry, but the results were disastrous. Intel recorded huge losses and was pushed into a situation where it was mentioned as a potential acquisition target by TSMC. Intel is also struggling in the server sector, where it once dominated, losing ground to AMD, Nvidia, and ARM. Intel did not even submit a bid for South Korea's national supercomputer No. 6 project. The graphics processing units (GPUs) introduced by Intel are lagging behind those of Nvidia and AMD.

CEO Tan has formulated a strategy to focus on securing external customers to expand the foundry business. It is known that Tan has expressed the view that Intel's foundry business can succeed if it secures at least two major customers.

Coming from the semiconductor design company Cadence, CEO Tan is an expert who has experienced Intel's foundry strategy. He was a member of Intel's board and was in charge of Intel's foundry business in 2023 but left the company last year, shocked by the lack of technological capability and deterioration of corporate culture.

Tan's remedy involves additional layoffs following the large-scale restructuring carried out at the end of last year. The target is presumed to be the "middle management" layer, which he pointed out as causing bottlenecks. This is interpreted as a determination to boldly cut personnel who have lost the "obsessive" research and development spirit emphasized by former Intel CEO Andy Grove and to eliminate the slowed decision-making system. Tan's goal is to speed up decision-making through reorganization of the management sector and strengthen competitiveness in advanced fields such as AI.

Tan has also expressed his intention to strengthen areas that Intel has previously neglected, such as software and robotics. However, industry experts predict that it will take considerable time before Intel can introduce GPUs that can compete with Nvidia.

Meanwhile, as Tan's strategy was revealed, Intel's stock price surged by 8% in the Nasdaq market on the same day.

This content was produced with the assistance of AI translation services.