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Intel CEO Lip-Bu Tan has penned a letter to the firm’s employees, where he stresses that while it will not be easy for him to turn the firm around, he believes it has all the tools necessary to succeed. Lip-Bu takes over the helm at Intel after the firm bled more than half of its value in 2024 after failing to target the AI industry, suspending its dividend and struggling in the enterprise computing industry.
Lip-Bu’s first message to his team was rife with humility as he stressed that Intel’s customers were counting on the firm to “pull together as a team and deliver for them.”He added that Intel has to establish itself “as a world-class foundry,” to hint that a split might not be the first thing on his mind after taking over.
Intel CEO Believes Firm Will Deliver To Shareholders Through Solid Customer Satisfaction
Lip-Bu takes over at Intel when the firm’s future has seen considerable speculation. The tail end of 2024, after Gelsinger’s surprise departure, saw some quarters speculate that Intel might spinoff its foundry business to focus on designing products. Manufacturing chips is a costly effort, with the decision thought to help the firm stabilize its balance sheet.
However, Intel’s former two co-CEOs, Michelle Johnstone Holthaus and David Zinsner, remained quiet on a spinoff at a Barclays conference in December. Holthaus stressed that it made no sense if the two businesses were “completely separated and there’s no tie.” Intel had already set up its foundry business into a subsidiary in September, and Zinsner, who will now return to his role as the firm’s CFO, remarked that a complete separation was “an open question for you know another day.”
On the topic of complete separation, Lip-Bu’s letter to Intel employees is quite telling. He starts off by stating that challenges motivate him to solve problems. Intel has “a truly unique opportunity to remake our company at one of the most pivotal moments in its history,” believes the new CEO. While he admits that a turnaround won’t be easy, he believes “with every fiber of [his] being that we have what it takes to win.“
Under Lip-Bu’s leadership, Intel will be an “Intel will be an engineering-focused company,” outlines the letter. “[W]e are the founders of ‘The New Intel’,” he writes and adds that customer satisfaction will be the indispensable facet of achieving his vision.
His comments on the foundry business are brief. Along with establishing “Intel’s position as a world-class products company,” Lip-Bu will also work on establishing “ourselves as a world-class foundry” and delighting customers.
In turn, customer satisfaction will allow the firm to deliver value to shareholders, believes the new executive. He takes charge at Intel at a time when the firm is racing to deliver with its 18A chip manufacturing process. Intel also aims to win over customers with its foundry business to compete with Taiwan’s TSMC in the contract manufacturing industry. TSMC announced a $100 billion investment in the US with President Trump earlier this month and is on track with a new manufacturing facility in Arizona. The shares jumped by 11.5% in aftermarket trading after his announcement in another gain this year for the firm that shed more than 50% in 2024.
