Intel's incoming CEO, Chen Lifwu, is set to implement significant changes to the company's chip manufacturing and artificial intelligence (AI) strategies to rejuvenate the struggling tech giant. These plans include restructuring Intel's AI approach and implementing layoffs to address what Chen perceives as a slow and bloated middle management. A core priority for Chen is revamping the company's manufacturing business, which historically produced chips solely for Intel but now also manufactures semiconductors for external clients like Nvidia.
Following the news, Intel's stock (INTC, Financial) surged over 7% at the market open. In a recent company-wide meeting, Chen emphasized the need for "tough decisions" to be made. His short-term objective is to enhance the performance of Intel's manufacturing division by aggressively pursuing new clients, including Microsoft and Amazon, for whom Intel produces chips.
Intel plans to resume AI server chip production and explore opportunities beyond servers in software, robotics, and foundational AI models. A company spokesperson stated that Chen will spend considerable time listening to feedback from customers, partners, and employees, working closely with Intel's leadership team to prepare for future success.
As Chen assumes his role, he aims to bring a fresh perspective to Intel's workforce, which currently has approximately 109,000 employees following layoffs of about 15,000 last year. In addition to workforce reductions, Chen is focused on optimizing Intel's existing manufacturing operations. The next-generation Panther Lake chips, featuring AI capabilities, will rely on Intel's internal facilities using the company's new "18A" technology.
With the anticipated mass production of Intel's first internal chips using the 18A process this year, Chen is expected to concentrate on improving output methods to print more chips per silicon wafer. Intel aims to release AI chips annually, similar to Nvidia, but a compelling new architecture for its first AI chip is not expected until at least 2027.
