Lip-Bu Tan Makes His First Public Appearance as Intel's New CEO, Outlining His Plan to Restore the Struggling Chipmaker

Intel's new CEO Lip-Bu Tan made his first major public appearance at the company's Vision 2025 conference in Las Vegas.

New Intel CEO Lip-Bu Tan made his first major public appearance at the company's Vision 2025 conference in Las Vegas.

His candid assessment of Intel's challenges saw the stock slide nearly 3% as he set out his plan to return the struggling chipmaker to former glory.

Tan recognized that Intel has had "a tough period for quite a long time." He took responsibility for the company's recent shortcomings, stating they "fell behind on innovation" and were "too slow to adapt" to customer needs.

The new CEO warned investors and customers that turning around Intel "won't be easy" and "won't happen overnight." This realistic assessment stands in contrast to previous leadership's more optimistic timeline projections.

In his speech, Tan outlined a plan to free up resources by spinning off non-core businesses. While he didn't specify which divisions would be deemed non-core, this approach signals a more focused strategy.

"Going forward at Intel, we will redefine some of our strategy and then free up the bandwidth. Some of the non-core business, we will spin it off, but really focus on our core business and how to expand that using AI and Software 2.0," Tan explained.

Rebuilding Trust Through Engineering Excellence

Tan repeatedly stressed the importance of rebuilding Intel's engineering culture. Truist analysts noted that he used the word "culture" over 20 times during his address, describing his focus as a "breath of fresh air."

A key part of Tan's approach involves recruiting and retaining top engineering talent. "His priority is to recruit and retain the best engineers to empower growth and create a culture of innovation empowerment," Truist analysts wrote.

Tan also directly addressed customer concerns, acknowledging that they have graded Intel's products as "modestly D's and F's" in recent years.

He promised to solicit customer feedback, correct mistakes, and rebuild trust through a philosophy of "under-promising and over-delivering." This has been his "trademark" throughout his career, he stated.

The new CEO also vowed to continue Intel's foundry strategy, where it designs and manufactures chips. "Global demand for chip production is growing, and you need supply chains that are flexible, resilient, and secure. Intel foundry plays a crucial role," Tan said.

Intel also plans to compete with Nvidia in the rack-scale AI server market. This comes after Nvidia replaced Intel in the Dow Jones Industrial Average in November 2024, highlighting Intel's competitive challenges.

Tan highlighted a return to a startup mentality at the tech giant.

"Bureaucracy kills innovation. In my career, I've seen how small, focused teams can move very fast and innovate and take on incumbents, and we're going to practice that in Intel," he said.

Analyst reactions to Tan's speech were mixed. While Truist called it the "best ever messaging" from Intel management, Bernstein described it as "more of an apology than a keynote" that was "lighter on details than some might have hoped."

Political factors may also be affecting Intel's stock performance. Commerce Secretary Howard Lutnick suggested that the administration would withhold additional funds from chipmakers until they commit to greater U.S. investment.

This policy could particularly impact Intel, which has been one of the top recipients of government funding in the semiconductor sector.

The company has reportedly been working with investment bankers at Morgan Stanley and Goldman Sachs to restructure its business. Options include potentially splitting its foundry division.

Industry rumors suggest Broadcom may be interested in acquiring Intel's chip design and marketing unit, while Taiwan Semiconductor Manufacturing Company is reportedly eyeing Intel's chip manufacturing plants.

Rosenblatt analysts highlighted Tan's focus on customer service as "fundamental to turning Intel around, particularly the Foundry business." The firm also noted the importance of reshaping Intel's approach to hardware design.

Intel's recent leadership change follows the December departure of former CEO Pat Gelsinger, who had led an initiative to revamp the company's foundry division.