Intel’s New CEO Called ‘Strong Choice’ to Respin Company
By
Alan Patterson 03.13.2025
Intel’s new CEO, Lip-Bu Tan, is a good choice to turn the struggling U.S. chipmaker around, according to analysts who spoke to EE Times.
Tan, an industry veteran, is rejoining the Intel board after departing in August 2024, the company said in an announcement yesterday. He succeeds interim Co-CEOs David Zinsner and Michelle Holthaus. Zinsner will keep his position as executive VP and CFO, while Holthaus will remain CEO of Intel Products.
Tan faces numerous challenges. Three months ago, Pat Gelsinger departed as Intel CEO. For years, the top U.S. chipmaker has lost market share in its core CPU business to AMD while failing to enter new businesses like smartphone and AI chips. At the same time, Intel’s effort to divest its unprofitable chipmaking unit, Intel Foundry, as a standalone business is
likely to take years. Intel Foundry is still trying to catch up in process tech with foundry leader TSMC.
“I see significant opportunities to remake our business in ways that serve our customers better and create value for our shareholders,” Tan said in a prepared statement. “Intel has a powerful and differentiated computing platform, a vast customer installed base and a robust manufacturing footprint that is getting stronger by the day as we rebuild our process technology roadmap.”
Intel is rolling out its 18A process tech this year, which is likely to bring the company on a par with TSMC’s 2-nm process. Still, the company needs to switch from its focus on making Intel-branded chips only to making chips for a wide range of customers.
Tan is a “strong choice” to respin Intel Foundry into a customer-first organization, TechAnalysis analyst Jeff Koch told EE Times.
“Given that he left the board because of frustration with the slow-moving bureaucracy, he likely will give high priority to speeding up and slimming down the company,” Koch said. “We expect significant restructuring of the slow and ineffective middle management at Intel. Although his recent time was spent in management, Lip-Bu has technical bona fides and should approach the role with a technical eye. This contrasts with some of his predecessors who focused on financial engineering, to Intel’s long-term detriment.”
Handel Jones, CEO of International Business Strategies, who has known Tan for years, called the former Cadence CEO a “good choice” for Intel.
One of the priorities for the company is to become more competitive in AI accelerators for data centers, a business dominated by Nvidia, Jones said.
“Intel has the architectural expertise to accomplish this, but it will take 24 to 36 months,” Jones said. “It is likely that Intel will need to participate in the Arm processor ecosystem.”
Intel Foundry
Tan will need to accelerate efforts to spin off Intel Foundry as an independent entity or save the manufacturing unit from a predicament where Intel Products is the only major customer, according to analysts.
“The return of Tan as CEO suggests that spinning off or selling Intel Foundry will accelerate,” independent analyst Nicolas Baratte said in a report provided to EE Times. “It probably also means scaling down considerably Intel manufacturing plans and outsourcing more to TSMC. If you can’t beat them, join them.”
In February, Intel said that it plans to continue
outsourcing some production to TSMC to help launch products more quickly. Intel outsources about a third of its production to TSMC, according to Baratte.
Others said Intel Foundry is essential to reviving the U.S. semiconductor industry.
“Intel Foundry’s survival is key to America’s national and economic security as the only domestic company with advanced logic R&D and manufacturing capability,” SemiAnalysis said.
Shareholders and customers would benefit if Intel were to split in two, but doing so will take $30 billion in funding support for Intel Foundry to become financially viable, Jones said.
“That money can be found because it is strategically important in the U.S. for Intel to survive and have advanced manufacturing capacity,” Jones said.
Opposite directions
TSMC and Intel have moved in opposite directions with expansion plans. TSMC earlier this month
pledged to invest an additional $100 billion in chip production in the U.S. Intel will delay the opening of its new site in the
state of Ohio to around 2030.
TSMC makes more than 90% of the world’s most advanced chips for customers like Apple, Nvidia and AMD. The
Taiwanese company is growing while smaller rivals like
Samsung and
Intel slow manufacturing expansions in the U.S. The U.S. government may put pressure on TSMC to help Intel become a viable second source, according to Jones.
“The U.S. government wants a U.S. vendor that has competitive technology,” Jones said. “Intel will have trouble getting there without help. For TSMC, it will be a safety valve against U.S. government pressure. That would be much better for TSMC than sharing fab capacity.”
Press reports in February said that TSMC was considering the acquisition of a controlling stake in Intel Foundry as urged by U.S. President Donald Trump. Analysts said the
idea was highly unlikely.
Tan’s effort to reshape Intel will probably face internal resistance from people who want to restore the company to its position 20 years ago as the world’s largest chipmaker and keep the company intact, Baratte said.
Another group, including Tan, understands that Intel Foundry cannot catch up to TSMC without burning up to $200 billion, he added.
. Samsung seems broken on node development at this point.
