Since taking charge, Lip-Bu Tan has begun reassessing Intel's chip manufacturing strategies in light of significant financial losses.
New Cost-Cutting Initiatives
In his early months, Tan has focused on cutting costs and optimizing management. He eliminated what he deemed excess management and brought in new engineering talent. Intel has not turned a profit since 1986, reporting a net loss of $18.8 billion for 2024, highlighting the need for urgent changes.
Discussion on Shifting Focus to 14A Process
Tan expressed doubts about the 18A manufacturing process championed by his predecessor, Pat Gelsinger. He proposed exploring a shift in contract manufacturing strategies. The current technology developments for 18A may be shelved for external sales as demand decreases amid competition. However, in-house projects such as Panther Lake continue to rely on its development.
Intel's Future Amidst Changes
As Intel considers its next steps, it faces pressure to reacquire customers, especially with the success of competitors like TSMC. Tan aims to focus on developing 14A, hoping this will provide competitive advantages, particularly in the realms of mobile computing and artificial intelligence.
Amid current challenges, Intel is at a critical juncture which could define the company's future in the semiconductor market and its financial performance. The strategic choices made now could significantly impact the restoration of the business.
