Is Intel collapsing under CEO Lip-Bu Tan? What went wrong with one of Silicon Valley's most iconic companies
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Global technology stocks, including Nvidia and Advanced Micro Devices (AMD), are cheering on Thursday but Intel share price has gone down. This comes as U.S. President Donald Trump has called for the immediate resignation of Intel CEO Lip-Bu Tan , just months after he took the top job at the chipmaker, following concerns over his ties to Chinese firms through several investments. Tan has made hundreds of investments in Chinese companies over decades through Walden International, the San Francisco venture capital firm he founded in 1987, and two Hong Kong-based holding companies, Sakarya Limited and Seine Limited.Intel is one of Silicon Valley 's most iconic companies, but its fortunes have been dwarfed by Asian powerhouses TSMC and Samsung, which dominate the made-to-order semiconductor business. The company was also caught by surprise with the emergence of Nvidia as the world's preeminent AI chip provider.Intel's niche has been in chips used in traditional computing processes, steadily being eclipsed by the AI revolution.Once the dominant force in chip-making, the company is in the middle of a strategy shift meant to revive its fortunes after it fell behind Taiwanese rival TSMC in manufacturing. Intel also has virtually no presence in the booming market for AI chips dominated by Nvidia.The storied chipmaker, once synonymous with America's chipmaking heft, has lagged due to years of strategic missteps.Rival Nvidia has leaped ahead in the booming artificial intelligence chip industry, while rival AMD has been gaining share in Intel's mainstay personal computer and server semiconductor markets.CEO Tan has been focusing on a next-generation chipmaking process called 14A to win big external customers, shifting away from 18A, a technology that his predecessor Pat Gelsinger had spent billions of dollars to develop.Such a move could lead to a big writedown, an expense that would surely displease investors even as Intel has signaled that the new technology will help it be more competitive against Taiwan's TSMC, the world's biggest chipmaking factory.Longer-term commentary on the company's plans for the 14A technology "will hold more weight this earnings call than anything else", Stifel analysts wrote.Back in July, Intel posted quarterly revenue that topped market expectations, saying it has cut about 15 percent of its workforce to be "more agile." Intel reported $12.9 billion in sales in the recently ended quarter, topping forecasts, but logged a $2.9 billion loss that included $1.9 billion in restructuring charges."Intel has completed the majority of the planned headcount actions it announced last quarter to reduce its core workforce by approximately 15 percent," the company said in an earnings release.Intel chief executive Lip-Bu Tan took the helm in March, announcing layoffs as White House tariffs and export restrictions muddied the market. Malaysia-born tech industry veteran Tan has said it "won't be easy" to overcome challenges faced by the company.Tan, who took over the CEO role in March after the ousting of his predecessor Pat Gelsinger late last year, has set a goal of slashing the chipmaker's workforce to 75,000 people by year-end, a reduction of around 22 per cent. Intel also vowed to take a more disciplined approach to manufacturing investment.Since taking over as CEO in March, Tan has focused on shedding non-core assets. In April, Intel agreed to sell a 51 per cent stake in its Altera programmable chip business for $4.46 billion. The company has also considered divesting its network and edge businesses as well.The US chip maker also said it "will no longer move forward" with projects in Germany and Poland as part of a push to save billions of dollars.A1. Malaysia-born tech industry veteran Lip-Bu Tan is Intel CEO.A2. Lip-Bu Tan, who took over the CEO role in March after the ousting of his predecessor Pat Gelsinger late last year, has set a goal of slashing the chipmaker's workforce to 75,000 people by year-end, a reduction of around 22 per cent. Intel also vowed to take a more disciplined approach to manufacturing investment.
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