Intel's New CEO Lip-Bu Tan Reaffirms "World-Class Foundry" Vision, Casting Doubt on Spinoff Rumors

[AleksandarK]

At the time of crisis for Intel and uncertainty with foundry goals, Intel has appointed a semiconductor veteran as its new Chief Executive Officer (CEO)—Lip-Bu Tan. In a letter to Intel employees, Lip-Bu Tan has quietly addressed Intel Foundry spinoff rumors, saying that his commitment as a CEO is to "restore Intel's position as a world-class products company, establish ourselves as a world-class foundry and delight our customers like never before." Hence, the foundry spinoff rumors are now not so certain. Previous industry rumors suggested that Intel may very well spin off its fabs entirely or get it in a joint venture that would see TSMC and US companies like AMD, Broadcom, and NVIDIA get a part of the say. That is still a possibility. However, Intel's new CEO understands the strategic importance of Intel's fabs, just like the previous CEO, Pat Gelsinger.

Intel moves a lot of volume with its products, most of that thanks to its internal manufacturing capacity. Without it, Intel would be forced to go to external fabs like Samsung and TSMC and deal with additional complexity, lead times, etc. With the 18A node, Intel plans to use it for its products and offer it to external customers. Some features like backside power delivery using PowerVia and RibbonFET are standout aspects that make its 18A node PDK much more attractive on paper than solutions from TSMC and Samsung. Keeping that technology and manufacturing ability inside Intel is strategically vital for both Intel and US-based advanced silicon manufacturing. The foundry has been burning a lot of cash, 13.4 billion in 2024 alone, but Intel expects it to be net positive by the end of 2027. After that, Intel's products and external customers should be keeping Intel's fab busy with enough revenue to offset losses in the coming years.




Here is the complete letter:

Team,

I'm humbled and honored to be your next CEO.

Intel is a company I have long admired. Since I was a child, I have been captivated by the power of science, technology and engineering—and Intel's innovation has been at the heart of so many world-changing breakthroughs along the way.

Of course, as we all know, past achievements do not predict future success, especially in an industry as dynamic as ours. The pace of change continues to accelerate, and the competition is intense. You understand this better than anyone, and I know it has been a tough few years for all of you and your teams.

One of the things you will learn about me is that I am never deterred by challenges. Throughout my career, they have motivated me to solve hard problems. As I prepare to come on board, I believe we have a truly unique opportunity to remake our company at one of the most pivotal moments in its history.

That's not to say it will be easy. It won't be. But I am joining because I believe with every fiber of my being that we have what it takes to win. Intel plays an essential role in the technology ecosystem, both in the U.S. and around the world. And, together, I'm confident we can turn our business around.

Under my leadership, Intel will be an engineering-focused company. We will push ourselves to develop the best products, listen intently to our customers and hold ourselves accountable to the commitments we make so that we build trust.

I subscribe to a simple philosophy: Stay humble. Work hard. Delight our customers. When you anchor yourself in those three core beliefs, good things happen. This has been true in every job I've ever had, and it's the way I will approach the work ahead as your CEO.

We cannot take anything for granted, and we will do regular deep dives to assess our progress. In areas where we have momentum, we need to double down and extend our advantage. In areas where we are behind the competition, we need to take calculated risks to disrupt and leapfrog. And in areas where our progress has been slower than expected, we need to find new ways to pick up the pace.

Most importantly, we need to work as one team. One of the most enduring lessons I learned during my university days came as an athlete, not a student. I learned to believe in and trust my teammates, because I knew that was the surest path to victory—and there's nothing I dislike more than losing. This is the mentality we all need to embrace as we build a winning culture across Intel.

Now more than ever, our customers are counting on us to pull together as a team and deliver for them. Above all else, that is and will remain our number one priority. And as your CEO, I will empower leaders to take ownership and actions to move our business forward.

We have a chance to do something special together. In many ways, we are the founders of "The New Intel." We will learn from past mistakes, use setbacks to strengthen our resolve and choose action over distraction to reach our full potential.

Together, we will work hard to restore Intel's position as a world-class products company, establish ourselves as a world-class foundry and delight our customers like never before. That's what this moment demands of us as we remake Intel for the future.

We also have a responsibility to deliver for our shareholders—something I am equally focused on and expect will be an outcome of our renewed focus on customers.

I'm grateful for the trust the board has placed in me to lead this great company forward. I'm proud to be joining the team and excited about our work together.

Best,
Lip-Bu Tan

View at TechPowerUp Main Site | Source

 

[LittleBro]

At the time of crisis for Intel and uncertainty with foundry goals, Intel has appointed a veteran semiconductor as its new Chief Executive Officer (CEO)—Lip-Bu Tan.

This sentence is hilarious. A semiconductor is now leading Intel?

 

[Onasi]

This sentence is hilarious. A semiconductor is now leading Intel?

Makes sense, who better to organize the production of semiconductors than someone who came off the wafer themselves?

 

[AleksandarK]

This sentence is hilarious. A semiconductor is now leading Intel?

Good laugh indeed The morning coffee hasn't kicked in yet! Thanks!

 

[mtosev]

I wish him good luck with leading Intel.

 

[azrael]

I hope it's not just Lip service...

(I'll get my coat.)

 

[Caring1]

He should be called Lip Balm, brought in to smooth things over.

 

[Rightness_1]

We really need Intel to offer the same or better than TSMC's cutting edge for custom silicon from other manufactures, like AMD and nVidia. But I'm not sure Intel has what it takes anymore.

 

[Daven]

So they’ve learned absolutely nothing from past mistakes, plan to stay the course and change nothing. Bold move, Intel. Bold move.

Edit: To add insult to injury, a refresh is coming.

Intel Arrow Lake Refresh reportedly confirmed, focusing on AI upgrade - VideoCardz.com

Arrow Lake Refresh rumors are back Intel is reportedly confirmed to be launching a refresh of its Arrow Lake platform. The Arrow Lake series, now powering Intel’s new desktops and laptops, is expected to get a refresh. The said refresh (ARL-R) was previously reported to have been canceled, only...

videocardz.com

 

[Bomby569]

So they’ve learned absolutely nothing from past mistakes, plan to stay the course and change nothing. Bold move, Intel. Bold move.

Edit: To add insult to injury, a refresh is coming.

Intel Arrow Lake Refresh reportedly confirmed, focusing on AI upgrade - VideoCardz.com

Arrow Lake Refresh rumors are back Intel is reportedly confirmed to be launching a refresh of its Arrow Lake platform. The Arrow Lake series, now powering Intel’s new desktops and laptops, is expected to get a refresh. The said refresh (ARL-R) was previously reported to have been canceled, only...

videocardz.com

i doubt the man had any say in that, he was just appointed

 

[redeye]

so intel is lying on the beach, and getting a Lip-Bu Tan , (not going to add ”don’t stay on the beach, intel or you will get sun burn…lol).
…intel’s laziness will cause the sunburn, not Lip-Bu Tan. He knows how to get an awesome Tan, because he puts in the work... the last guy got burned to a crisp…

 

[john_]

So, they fired Pat who was promoting manufacturing and hired someone who will promote manufacturing.
Good one.


Let's consider this. How about Pat's plan was going great with 18A and the board seen it, thought that Pat turning Intel around would make him all powerful in Intel and probably a threat to them, especially if they had strong disagreements. So they force him to resign and hire someone else to lead the future Intel, someone who can't brag about saving Intel, someone who will not be powerful enough in Intel to be a threat to the board.

 

[Bobaganoosh]

his statements sound just like Pat's lol.

 

[Squared]

So they’ve learned absolutely nothing from past mistakes, plan to stay the course and change nothing. Bold move, Intel. Bold move.

Edit: To add insult to injury, a refresh is coming.

Intel Arrow Lake Refresh reportedly confirmed, focusing on AI upgrade - VideoCardz.com

Arrow Lake Refresh rumors are back Intel is reportedly confirmed to be launching a refresh of its Arrow Lake platform. The Arrow Lake series, now powering Intel’s new desktops and laptops, is expected to get a refresh. The said refresh (ARL-R) was previously reported to have been canceled, only...

videocardz.com

There are only a few Arrow Lake-H reviews but they're mostly highly positive. Lion Cove and Skymont are pretty good but Lion Cove barely improved IPC in gaming—like Zen 5—and suffered from a clock speed regression. Fix the clock speed and it'll compete well with Zen 5, so I think a refresh could be pretty good. And it's obvious nothing better is coming because the only other official new line for this year is Panther Lake which everyone says is mobile-focused. AMD also has nothing lined up for this year. But AMD does have "X3D" chips which Intel is not likely to match with a refresh.

his statements sound just like Pat's lol.

When Gelsinger left Intel, I assumed it was because the board wanted to split Intel. Now I wonder if the board is on the same page as Gelsinger and Tan regarding the foundry business (perhaps reluctantly), and perhaps something else was wrong. As someone watching from the outside, I saw Intel burning through cash but making foundry progress, then the news that Lunar Lake and later Arrow Lake moved to TSMC, and I figured Intel was in rough times until 18A comes to market. But I didn't see Intel admit that until the next quarterly report. Seems like Gelsinger could've been taking steps to run a leaner Intel in the months leading up to this, given there would soon be no choice. Gelsinger also talked about Arrow Lake and I read between the lines and saw that Arrow Lake on desktop was more efficient than Raptor Lake but not faster at gaming, but from the comments most others did not. Gelsinger could've managed expectations better. So I felt like Gelsinger was perhaps not the best communicator.

 

[Bobaganoosh]

There are only a few Arrow Lake-H reviews but they're mostly highly positive. Lion Cove and Skymont are pretty good but Lion Cove barely improved IPC in gaming—like Zen 5—and suffered from a clock speed regression. Fix the clock speed and it'll compete well with Zen 5, so I think a refresh could be pretty good. And it's obvious nothing better is coming because the only other official new line for this year is Panther Lake which everyone says is mobile-focused. AMD also has nothing lined up for this year. But AMD does have "X3D" chips which Intel is not likely to match with a refresh.

When Gelsinger left Intel, I assumed it was because the board wanted to split Intel. Now I wonder if the board is on the same page as Gelsinger and Tan regarding the foundry business (perhaps reluctantly), and perhaps something else was wrong. As someone watching from the outside, I saw Intel burning through cash but making foundry progress, then the news that Lunar Lake and later Arrow Lake moved to TSMC, and I figured Intel was in rough times until 18A comes to market. But I didn't see Intel admit that until the next quarterly report. Seems like Gelsinger could've been taking steps to run a leaner Intel in the months leading up to this, given there would soon be no choice. Gelsinger also talked about Arrow Lake and I read between the lines and saw that Arrow Lake on desktop was more efficient than Raptor Lake but not faster at gaming, but from the comments most others did not. Gelsinger could've managed expectations better. So I felt like Gelsinger was perhaps not the best communicator.

I had always assumed that Pat got forced out because they didn't think they'd get the stock price to recover while he was there. Someone had to be a scapegoat and they gambled that pushing out the CEO would do it. I think it's completely believable that there were also some personality issues/disagreements with the board and Pat and that also made them want to do it, but I'm not at all convinced that they had a grand disagreement with him on the best path forward for Intel. I just think that for whatever reason, they didn't think Pat could convince people to buy more stock and they were desperate to try and turn the downward trend around. It reminds me of premier league teams firing a manager the fans generally like because results are bad when the real problem is recruitment, squad depth, and investment from the ownership. The owners just think "a fresh face will turn the ship around, surely".

 

[SirJynx]

So they’ve learned absolutely nothing from past mistakes, plan to stay the course and change nothing. Bold move, Intel. Bold move.

Edit: To add insult to injury, a refresh is coming.

Intel Arrow Lake Refresh reportedly confirmed, focusing on AI upgrade - VideoCardz.com

Arrow Lake Refresh rumors are back Intel is reportedly confirmed to be launching a refresh of its Arrow Lake platform. The Arrow Lake series, now powering Intel’s new desktops and laptops, is expected to get a refresh. The said refresh (ARL-R) was previously reported to have been canceled, only...

videocardz.com

I'm not sure what you mean? Semiconductor technology is a slow, laborious task to upgrade. The past mistake that ruined Intel was that the CEO before Pat was focused on stock buy backs, and not technology. Pat's mistake was not his vision, it was his execution. Overextending finances with massive and diversified investments in new fabs Intel books couldn't support. 13th/14th gen microcode issues. Delayed products. Cancelled products. Flopped 15th gen launch after promising it wouldn't have the issues it does/did. The vision was always Intels only road to success and it takes time to come to fruition with 18a. Wafers takes months to make, fabs take years to build. Tools take months to transport and install. You have to pay employees to work on projects that cost money and have no customers or profits to speak of for years down the line.

Edit: refreshes are absolutely common in every chips lifecycle as the manufacturing technology matures. Why is that insult to injury?

 

[SirJynx]

So, they fired Pat who was promoting manufacturing and hired someone who will promote manufacturing.
Good one.


Let's consider this. How about Pat's plan was going great with 18A and the board seen it, thought that Pat turning Intel around would make him all powerful in Intel and probably a threat to them, especially if they had strong disagreements. So they force him to resign and hire someone else to lead the future Intel, someone who can't brag about saving Intel, someone who will not be powerful enough in Intel to be a threat to the board.

The forced him out because his spending was out of control and his execution was poor. Not because of his vision or his ability to become all powerful.