Lip-Bu Tan’s return as Intel’s CEO comes at a critical moment for the once-dominant chipmaker, which has struggled to keep pace with competitors like Nvidia, AMD, and TSMC. Intel, long regarded as an icon of American technology and innovation, has faced a series of missteps and missed opportunities over the past decade — from failing to adapt to the smartphone revolution to falling behind in the AI chip race. With Tan at the helm, the company is now bracing for an aggressive overhaul aimed at revitalizing its core business while carving out a stronger foothold in emerging technologies like artificial intelligence, robotics, and software.
Tan, 65, brings a wealth of experience from his tenure as CEO of Cadence Design Systems, a leading chip design software company, and his role as a venture capitalist with Walden Catalyst. His track record as an investor and board member positions him uniquely to navigate Intel through a turbulent landscape where innovation cycles are shorter, competitors are stronger, and global supply chains are more unpredictable than ever. He steps into the role after serving on Intel’s board, which gives him firsthand knowledge of the company's internal struggles — and a clear-eyed view of what needs to change.
One of Tan’s most immediate priorities is restructuring Intel’s manufacturing arm, Intel Foundry Services (IFS), which was a key part of former CEO Pat Gelsinger’s strategy to transform Intel into a major contract chip manufacturer. Gelsinger’s vision aimed to rival TSMC by producing chips not just for Intel’s own products but also for outside tech giants like Microsoft, Amazon, and Qualcomm. However, slow execution, shifting market conditions, and Intel’s declining market share led to scaled-back ambitions and financial losses. Tan plans to reinvigorate IFS by courting new customers more aggressively and ensuring Intel’s factories operate at full capacity — a move designed to restore profitability and offset declining sales in Intel’s traditional processor business.
Beyond manufacturing, Tan is spearheading a strategic pivot toward AI — an area where Intel has been outpaced by Nvidia and other rivals. Nvidia’s dominance in GPUs, which are essential for training and running large AI models, has allowed it to capture a significant portion of the rapidly growing AI market. Tan wants Intel to catch up by accelerating the development of its own AI-centric chips, focusing not only on AI servers but also on foundational models and new software ecosystems that could power future AI applications. This includes exploring opportunities in robotics and edge computing, where Intel’s x86 architecture could still hold an advantage — if the company innovates fast enough.
However, perhaps the most controversial part of Tan’s plan involves internal restructuring. Sources familiar with his thinking suggest that Tan views Intel’s middle management as bloated and slow-moving, contributing to the company’s sluggish response to market changes. While Gelsinger was praised for his vision and optimism, critics say he avoided making tough decisions about layoffs and cost-cutting. Tan appears less hesitant, signaling that job cuts, particularly among mid-level executives, could be on the table. His goal is to streamline decision-making, speed up product development, and eliminate inefficiencies that have hampered Intel’s agility.
The company’s financial situation underscores the urgency of these changes. Intel reported a staggering $19 billion annual loss in 2024 — its first since 1986 — reflecting not only declining sales but also the massive investments Gelsinger made in building new factories in the U.S. and Europe. While these investments are meant to secure Intel’s long-term position as a global foundry leader, they’ve put immediate pressure on the company’s balance sheet. Tan is expected to balance these long-term bets with a more pragmatic approach to costs and near-term profitability, potentially scaling back or delaying some projects that don’t offer quick returns.
Tan’s leadership style also marks a shift. Known for his pragmatic, results-driven approach, he’s expected to spend significant time engaging with customers, partners, and employees to rebuild trust and align Intel’s product roadmap with market demands. This contrasts with Gelsinger’s more engineering-focused leadership style, which, while visionary, struggled to translate into faster execution and market wins.
The semiconductor industry is at an inflection point, with AI, quantum computing, and advanced packaging technologies reshaping the competitive landscape. Intel still has key strengths — including its deep engineering talent, extensive IP portfolio, and global brand recognition — but whether those advantages translate into renewed market leadership will depend on how effectively Tan executes his turnaround plan.
Investors, employees, and customers alike will be watching closely. If Tan can deliver on his promises to streamline operations, accelerate AI innovation, and reestablish Intel as a foundry powerhouse, he may yet steer the company back to its former glory. If not, Intel risks falling further behind — a scenario that once seemed unthinkable for the Silicon Valley giant that helped pioneer the modern computing era.
