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Intel races to find its next CEO, but insiders say no clear frontrunners yet

XYang2023

Well-known member
Intel (INTC) is racing against the clock to find a new chief executive who can launch the company into the artificial intelligence age — or risk sinking into irrelevance.

A series of strategic missteps dating back to the early 2000s and a failure to build cutting-edge technologies culminated in the once-dominant chipmaker’s dramatic crash in 2024, when its stock plummeted 55%.


Its board ousted CEO Pat Gelsinger in December and appointed two temporary co-CEOs.

The move laid bare the board’s lack of a coherent strategy and called into question the fate of Gelsinger's bold turnaround plan: Opening up Intel’s manufacturing business to make chips for external customers (i.e. operating a foundry).

“I think it's the board that should have been fired, not him,” analyst William Lazonick, who has written extensively on Intel for the Institute of New Economic Thinking, told Yahoo Finance.

Since Gelsinger’s exit, the board has brought on two semiconductor experts, former ASML CEO Eric Meurice and Microchip chairman Steve Sanghi. Prior to their addition, only two of the 11 board members had semiconductor industry experience, per Citi analyst Christopher Danley.

A Wall Street Intel analyst said Meurice and Sanghi are "already ... challenging the plans [and] the processes within Intel." They asked to remain anonymous because they were not authorized to speak publicly on the topic.

Intel declined to comment on its CEO search.


 
The profiles of some of the people mentioned in the article:




 
Seems a bit of a stretch to claim that Intel is "racing to find its next CEO". Pat went at Thanksgiving. Nearly 2 months ago now. Let's be optimistic and assume Intel were thinking ahead here and started the search at least 1 month before firing Pat - that's at least 3 months and counting. Quite a lot more if the BoD are on top of it.
 
The profiles of some of the people mentioned in the article:





Interesting. I believe all of them think Intel should outsource and not do internal manufacturing (or very limited manufacturing). They do not believe Intel needs IDM capability.
 
Interesting. I believe all of them think Intel should outsource and not do internal manufacturing (or very limited manufacturing). They do not believe Intel needs IDM capability.
It’s hard to determine, considering TSMC is charging such high prices for leading-edge manufacturing. Additionally, what happens if there’s a conflict in the Taiwan Strait? Today’s Stargate announcement by SoftBank clearly aims to boost ARM’s presence in data centers. I think the key question is how to operate the foundry efficiently and turn it into a strategic asset for Intel.

For Intel Foundry, the following processes should be in place to serve external customers:
1. 12nm (in collaboration with UMC)
2. Intel 3 (expected to perform well)
3. Intel 18A (awaiting for more info)
4. Intel 14A (status currently unknown)

The original goal is to offer system foundry services.
 
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(Next) Thursday 1/30 is when we'll hear Intel's Q4 earnings; telling us if that was the reason for his firing. (Dec 1 firing = they'd have a good idea on Q4 sales with 2 months finished).

What is clear is that this was a knee jerk reaction:
- They are still executing HIS plan
- They assigned co-CEOs that aren't obvious choices to be the next CEO
- It was done over a weekend after a holiday
- Pat is getting involved in other things now (Fractal AI), he's getting busy again and clearly didn't retire for 'hidden' reasons

 
Them trying to split will be the worst decision ever and will loose horribly in long term now that shrinks are becoming more problematic they can milk the nodes for longer.considering what they have is a dual edged sword (Foundry) it was their foundry that made them dominant not their designs
 
(Next) Thursday 1/30 is when we'll hear Intel's Q4 earnings; telling us if that was the reason for his firing. (Dec 1 firing = they'd have a good idea on Q4 sales with 2 months finished).

What is clear is that this was a knee jerk reaction:
- They are still executing HIS plan
- They assigned co-CEOs that aren't obvious choices to be the next CEO
- It was done over a weekend after a holiday
- Pat is getting involved in other things now (Fractal AI), he's getting busy again and clearly didn't retire for 'hidden' reasons

I got a kick out of seeing PG's LinkedIn profile headline. He calls himself an "electrical engineering expert". Not what I expected...
 
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Them trying to split will be the worst decision ever and will loose horribly in long term now that shrinks are becoming more problematic they can milk the nodes for longer.considering what they have is a dual edged sword (Foundry) it was their foundry that made them dominant not their designs
Instead of selling it to GF and letting GF profit from it, why can't Intel do it themselves? It could then act as an insurance policy that generates positive cash flows. Under certain scenarios, this insurance policy could become highly valuable and provide a competitive advantage.

Depending on operating conditions, Intel could scale foundry operations up or down to meet the visible demand from Intel products and external clients. This approach would prevent financial strain.
 
The profiles of some of the people mentioned in the article:

Lip-Bu Tan has too many business conflicts to be CEO and he could only be a part time CEO which will not be enough for Intel.

I do not know the other people mentioned but they do not seem qualified to me. Intel needs a big time CEO with a new plan. Pivot or die!
 
Lip-Bu Tan has too many business conflicts to be CEO and he could only be a part time CEO which will not be enough for Intel.

I do not know the other people mentioned but they do not seem qualified to me. Intel needs a big time CEO with a new plan. Pivot or die!
You could say that PG's strategy was a pivot, "betting the company on 18A." However, there may be no need for a drastic "pivot or die" approach. Instead, the company simply needs to stabilize and recover its finances. Once financially secure, it can then adopt a more aggressive strategy, including potential pivots.

One key area for improvement is efficiency. Operating in its current state, with more employees than its peers, is not acceptable.
 
You could say that PG's strategy was a pivot, "betting the company on 18A." However, there may be no need for a drastic "pivot or die" approach. Instead, the company simply needs to stabilize and recover its finances. Once financially secure, it can then adopt a more aggressive strategy, including potential pivots.

One key area for improvement is efficiency. Operating in its current state, with more employees than its peers, is not acceptable.

Was IDM 2.0 really a pivot? Intel had been in and out of the foundry business before and the TSMC outsourcing deal was not done by Pat. If I remember it correctly IDM 2.0 was a three legged stool: Manufacturing, Foundry, Outsourcing. Pat just renamed it a stool. Stool also means a piece of poop. :ROFLMAO:
 
Was IDM 2.0 really a pivot? Intel had been in and out of the foundry business before and the TSMC outsourcing deal was not done by Pat. If I remember it correctly IDM 2.0 was a three legged stool: Manufacturing, Foundry, Outsourcing. Pat just renamed it a stool. Stool also means a piece of poop. :ROFLMAO:
But I think it’s fair to say that committing more than $30 billion to the Chips Act and related processes represents a significant pivot.

His problem is that he is too focused on government affairs. While he should consider support from the government, he also needs to evaluate the potential risks of overcommitting. These should be the foremost concerns of a business manager.

At the same time, he was not quick enough to address the AI training market. As I’ve mentioned many times before, when OpenAI introduced ChatGPT, Intel decided not to launch Rialto Bridge to "optimize portfolios and cut costs." I just didn’t understand that decision.
 
It’s hard to determine, considering TSMC is charging such high prices for leading-edge manufacturing. Additionally, what happens if there’s a conflict in the Taiwan Strait? Today’s Stargate announcement by SoftBank clearly aims to boost ARM’s presence in data centers. I think the key question is how to operate the foundry efficiently and turn it into a strategic asset for Intel.

For Intel Foundry, the following processes should be in place to serve external customers:
1. 12nm (in collaboration with UMC)
2. Intel 3 (expected to perform well)
3. Intel 18A (awaiting for more info)
4. Intel 14A (status currently unknown)

The original goal is to offer system foundry services.
There are still some signs things are not completely smooth at Intel yet: https://www.msn.com/en-us/money/mar...=1&batchservertelemetry=1&noservertelemetry=1

The analysts noted that weaker numbers, a large layoff, and a long term capex cut frame the issues around Intel's June report.

Arguably the most concerning change is the cancellation of the company's dividend starting in the fourth quarter. Gross margins came in nearly 500 bps weaker due to transferring Meteor Lake production from the R&D fab in Oregon to Ireland and will remain at depressed levels till next year, according to the analysts.

The analysts added that Intel justifies this action with savings of $1B in capex spend they would have had to commit to Oregon, but they think this is likely more about accelerating external core products that are more competitive.

The company also talked about $1B coming out of variable cost of goods sold, or COGS, next year but indicated that savings keep margins flat implying other pressures moving margins down, the analysts added.

In addition, O'Malley and his team said that these are real structural issues that can be fixed by a strong ramp of the internal advanced processes, but the continued outsourcing, manufacturing fits and starts, and recent turnover in the manufacturing unit does seem like things are going worse not better.
 
Lip-Bu Tan has too many business conflicts to be CEO and he could only be a part time CEO which will not be enough for Intel.

I do not know the other people mentioned but they do not seem qualified to me. Intel needs a big time CEO with a new plan. Pivot or die!
I'd like to see Matt Murphy from Marvell take the job, but I doubt he wants to leave Marvell just as he finishes rebuilding it. However, I think what he has done at Marvell shows he should be a top candidate for the Intel board.
 
Them trying to split will be the worst decision ever and will loose horribly in long term now that shrinks are becoming more problematic they can milk the nodes for longer.considering what they have is a dual edged sword (Foundry) it was their foundry that made them dominant not their designs

Dual edged sword or dual bags of internal and external conflicts? Is it necessary to risk so much for Intel to prove that the whole industry's practice is wrong?

It can kill Intel!
 
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