Summary

• Tan to focus on Intel Foundry and AI chip production, sources say
• Tan aims to improve efficiency and revive Intel’s manufacturing prowess, sources say
• New Intel CEO plan likely to include management reorganization, sources say
• Tan is considering broadening Intel’s AI business, sources say

Some quote highlights:

The new trajectory includes restructuring the company’s approach to AI and staff cuts to address what Tan views as a slow-moving and bloated middle management layer.

Semiconductor industry expert Dylan Patel said a big problem under former Intel CEO Pat Gelsinger, who left the company in December, was that he was “too nice.” “He did not want to fire a bunch of middle management in the way they needed to,” he said.

It will also restart plans to produce chips that power AI servers and look to areas beyond servers in several areas such as software, robotics and AI foundation models.

Tan’s views were shaped by months of reviewing Intel’s manufacturing process after the board in late 2023 appointed him to a special role overseeing it, according to a regulatory filing.

In his assessment, he expressed frustration with the company’s culture, sources told Reuters, saying it had lost the “only the paranoid survive” ethos enshrined by former CEO Andy Grove. He also came to believe that decision-making was slowed down by a bloated workforce, Reuters reported.

Tan presented some of his ideas to Intel’s board last year, but they declined to put them into place, according to two people familiar with the matter. By August, Tan abruptly resigned over differences with the board, Reuters reported.