Lip Bu Tan, the newly appointed CEO of Intel, has inherited one of the most complex turnarounds in tech. The veteran semiconductor executive, best known for leading Cadence Design Systems and serving on the boards of over a dozen chip companies, stepped in on March 12, sending Intel stock up by over 15% the very next day.
But enthusiasm aside, the road ahead is daunting.
In a comprehensive report by Yahoo Finance, which interviewed Wall Street analysts and current/former Intel employees, three urgent challenges have been highlighted. Their insights sketch a clear roadmap for Tan—one that requires a mix of bold decisions, strategic patience, and cultural revitalization.
Key Highlights:
1. Rescuing the Foundry: Can Intel Attract Big Clients?
One of Intel’s biggest dilemmas is the sustainability of Intel Foundry Services (IFS). Former CEO Pat Gelsinger opened up Intel’s manufacturing to outside customers in 2021, attempting to emulate TSMC’s foundry model. While IFS struck high-profile deals with Amazon and Microsoft, it lost $13.4 billion on $17.5 billion in revenue in 2024.
With analysts warning that the foundry would not survive a company breakup, Tan must accelerate the launch of Intel’s 18A chip process and prove it can deliver. Employees told Yahoo Finance that 18A development is now progressing well, and there’s growing optimism internally.
Analyst Anshel Sag remarked, “If the results are good and companies are happy, they’ll increase their capacity at the foundry.”
Tan’s industry relationships may help Intel land more customers, but only execution—not credentials—will determine survival.
2. Learning from AI Failures Without Giving Up
Intel has stumbled repeatedly in its quest to lead the AI chip race, especially against Nvidia. Failed initiatives like Larrabee, Koduri’s GPU effort, and Falcon Shores have cost time and resources.
Despite these missteps, Tan appears committed to reinvigorating Intel’s AI efforts. He wrote to employees:
“Together, we will work hard to restore Intel’s position as a world-class products company and establish ourselves as a world-class foundry.”
A former executive told Yahoo Finance that Intel’s financial caution often undermines long-term bets:
“If you intend to be in that market long term, you might as well have access to the market, even if it costs you through the first generation.”
The message is clear: Tan must commit to AI not just as a product, but as a long-term vision.
3. Reviving ‘Team Blue’: Cutting Bureaucracy Without Breaking Morale
Internally, Intel is still regarded by many as slow, rigid, and overly layered. While layoffs are likely—perhaps in Q2 or Q3 of 2025—sources fear that morale and operational continuity could suffer, especially as Intel races to deliver on 18A.
One employee told Yahoo Finance:
“We’re already understaffed. If they cut middle management now, teams will be reshuffled, and chaos will follow.”
However, Tan’s job isn’t just about cost-cutting. It’s about cultural reinvention. One former high-ranking executive emphasized:
“The depth of talent at Intel is immense. The answer lies in inspiring the people you have.”
Tan must walk the tightrope: streamline the structure without losing the soul of Team Blue.
Why Intel Can’t Split — At Least Not Yet
Calls for splitting Intel into separate product and manufacturing businesses have grown louder. But as Bernstein analyst Stacy Rasgon noted, Intel’s foundry would go bankrupt on its own. The product division, too, can’t quickly shift to outside fabs because its chips are tightly integrated with Intel’s proprietary manufacturing.
Additionally, Intel is obligated to retain majority control of its foundry due to the billions received under the U.S. CHIPS Act.
In short, Tan must stabilize and reform Intel as a unified entity—for now.
Lip Bu Tan’s Window of Opportunity
Intel’s turnaround will not be instant. But if Tan can capitalize on his experience, re-energize Intel’s talent, and execute a believable roadmap for the foundry and AI divisions, he could succeed where others stumbled.
As insiders told Yahoo Finance, this may be Intel’s last real shot before drastic structural decisions become unavoidable.
For now, all eyes are on Lip-Bu Tan—and whether he can deliver the transformation Intel desperately needs.
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