Reboot Required: Can Intel’s New CEO Restore the System?
Can Lip-Bu Tan steer Intel away from financial trouble and reclaim its place as a semiconductor powerhouse?
Editorial Team (ET)May 8, 2025
Intel is at a crossroads, and its new CEO, Lip-Bu Tan, has been tasked with what might be the company’s last real chance to stage a comeback. A seasoned semiconductor executive with decades of industry experience, Tan’s appointment sent ripples through the market, boosting Intel’s stock by over 15% in a single day. But now comes the hard part—turning a struggling tech giant into a competitive powerhouse once again.
Intel is the only American company still competing in leading-edge semiconductor manufacturing, yet it has suffered years of setbacks, product delays, and strategic missteps. Many investors and analysts have argued that splitting up the company could be the best way forward. But Tan has made it clear—Intel is staying together, at least for now. To make that work, he has to overhaul Intel’s foundry business, push aggressively into AI, and revitalize company culture.
Can Intel’s Foundry Business Be Saved?
Intel’s foundry business is a critical piece of its survival. Unlike competitors like AMD and Nvidia, which rely on third-party manufacturers such as Taiwan’s TSMC, Intel both designs and manufactures its chips. This model once made Intel an undisputed leader in the industry, but in recent years, it has been a burden. The foundry arm, Intel Foundry Services (IFS), has struggled to attract major clients and reported a staggering $13.4 billion loss on $17.5 billion in revenue last year.
Former CEO Pat Gelsinger had ambitious plans to turn Intel’s foundry into a profitable enterprise by manufacturing chips for outside customers. The strategy showed promise, securing deals with major players like Amazon and Microsoft. However, analysts remain skeptical about whether Intel can sustain the business long-term.
Tan’s immediate challenge is to convince big customers to trust Intel’s manufacturing capabilities. The launch of its next-generation chip manufacturing process, 18A, is critical to this effort. If Intel can prove that its 18A process is competitive with TSMC and Samsung, it might just pull in the customers it needs to keep the foundry alive.
The AI Battle: Can Intel Catch Up?
AI is reshaping the semiconductor industry, and right now, Intel is playing catch-up. Nvidia dominates the AI chip market, with its GPUs serving as the backbone of the AI revolution. AMD, too, has made significant strides, leaving Intel struggling to break in.
Intel has fumbled several attempts to enter the AI chip space. Its first major effort, Larrabee, was scrapped in 2009. Another push in 2017, led by AMD’s former graphics chip guru Raja Koduri, also failed. And just this year, Intel abandoned its most recent AI GPU project, Falcon Shores.
Tan understands that Intel cannot afford another misstep. He is reportedly prioritizing AI, aiming to develop chips that can rival Nvidia and AMD. But Intel’s challenge isn’t just technological—it’s also cultural. The company has long been known for its slow-moving bureaucracy, which has stifled innovation.
Fixing Intel’s Culture
Reviving Intel isn’t just about technology; it’s about people. Former and current employees describe Intel as slow, bogged down by excessive middle management, and in dire need of a cultural reset.
Tan has already hinted that layoffs are coming. Some employees fear they could be massive, possibly hitting in the second or third quarter. But cutting jobs isn’t a silver bullet. Slashing middle management may streamline decision-making, but it could also create chaos if done too aggressively.
At its core, Intel is still home to some of the best engineering talent in the world. Employees have long been loyal to “Team Blue,” as they call themselves. The key to Intel’s turnaround will be inspiring these people, giving them the tools and freedom to innovate, and restoring a sense of purpose to the company.
The Stakes Couldn’t Be Higher
Lip-Bu Tan isn’t just fighting for Intel’s future—he’s fighting for America’s semiconductor independence. With geopolitical tensions rising and the U.S. government pushing to strengthen domestic chip production, Intel is a key piece of the puzzle. The CHIPS Act has provided billions in funding, but the company needs to prove it can compete.
If Tan succeeds, Intel could regain its status as a global leader. If he fails, the company could face an even grimmer fate—either breaking apart or becoming an acquisition target.
For now, Wall Street is giving Tan the benefit of the doubt. But the clock is ticking, and he has no room for mistakes.
