Major Restructuring Under Lip-Bu Tan
Intel is preparing for a dramatic transformation as its new CEO, Lip-Bu Tan, moves to overhaul the company’s approach to chip manufacturing and artificial intelligence strategy. Tan, former CEO of Cadence Design Systems and long-time industry veteran, took the helm in early 2025 amid intensified competition from rivals like TSMC, Samsung, and AMD[1][3].
Key Highlights of the Strategic Shift
- Significant workforce reductions: Intel will begin large-scale layoffs focused on factory and manufacturing roles this July. The cuts will affect thousands, mainly in older fabrication plants in the US, Europe, and Asia, as the company phases out legacy infrastructure[1].
- Refocusing manufacturing: Intel is shifting investment and talent toward next-generation fabrication such as EUV lithography and advanced 2nm production nodes, moving away from older production lines[1][3].
- Expanding foundry services: No longer limited to producing chips for its own products, Intel has opened its foundry to outside clients including companies like Nvidia, Microsoft, and Amazon[3].
- AI strategy and restructuring: A core aspect of Tan’s leadership will be a revised approach to artificial intelligence, encompassing manufacturing recalibration, restructuring the company's AI operations, and targeting inefficiencies in management[3].
Context Behind the Changes
Intel’s shake-up comes after a period of industry headwinds and the company's first annual loss since 1986 — reporting a $19 billion deficit in 2024[3]. The semiconductor sector, after rapid growth during the pandemic, is now experiencing cyclical downturns with softened demand, excess inventory, and global trade tensions affecting sales[1].
Leadership Committed to Listening and Innovation
Lip-Bu Tan is reportedly engaging closely with customers, partners, and employees as he formulates Intel’s future strategy. The focus will extend beyond manufacturing to areas such as software, robotics, and foundational AI models. According to a company spokesperson, “Lip-Bu will be spending a lot of time listening to customers, partners and employees as he comes on board and works closely with our leadership team to position the business for future success”[3].
What to Expect Next
The full details of Tan’s strategy are still evolving, but industry watchers anticipate further dramatic shifts throughout 2025. Intel is expected to maintain its aggressive push for technological leadership, with a leaner workforce and a diversified business model that places a new emphasis on customer relationships and advanced chip technologies[1][3].
Expanding into AI and Software
In addition to revamping its foundry services, Intel is also planning to renew its efforts in producing chips for
AI servers and to explore more opportunities in the field of
AI foundation models, signaling a broader pivot toward intelligent technologies and new growth areas[3].
