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Intel’s Vice President of Corporate Planning and Investor Relations, John Pitzer, discussed key details about CEO Lip-Bu Tan’s turnaround strategy and the company’s upcoming AI plans during a recent presentation at the Goldman Sachs Communacopia + Technology Conference. He also spoke on Intel’s 14A chip manufacturing process, noting that it represents a significant departure from previous technologies due to early involvement of external customers in its development.
Intel CEO Lip-Bu Tan’s Layoff Strategy Is Vastly Different From Predecessor
The conversation began with Goldman Sachs’ semiconductor analyst Jim Schneider asking Pitzer about the most important changes brought by new CEO Lip-Bu Tan, particularly those that might be challenging for investors to see. According to Pitzer, most of Tan’s initiatives focused on changing Intel’s culture rather than restructuring. He explained that while previous restructuring was cost-cutting, this year’s efforts involved reorganizing operations and structure, leading to significant cost reductions.
Pitzer highlighted that Tan aimed to reduce Intel’s bureaucracy, which he believed was driving slow and poor decisions. To streamline the organization, Tan cut Intel’s 11 layers of management in half. Pitzer also mentioned that Tan is seeking a flatter organizational structure with increased accountability. As part of these changes, an office return policy was implemented last Tuesday.
When asked about Intel’s top priorities for the upcoming months, Pitzer listed four: fixing its x86 chip business, developing an AI strategy, making the foundry business operational, and improving the company’s balance sheet. He noted that Intel will likely share more details on its AI strategy in its third-quarter earnings report.
Regarding Intel’s role in the AI accelerator market over the next five years, Pitzer stated that they aim to have a meaningful presence. He suggested that fixing the core x86 business could provide consistent growth, but Tan has higher aspirations, necessitating a larger footprint in AI. Pitzer noted that Intel’s x86 ecosystem brings value to this market and can be disruptive in areas like power efficiency.
Intel’s Second-Quarter Earnings Report Raised Doubts About 14A Manufacturing Process
Pitzer clarified that Intel was “all in” on the 14A development, stating that external customers’ interest is crucial. He explained that while PDK readiness and maturity are important, yield curve performance is also key. Pitzer noted that there are three phases for every process technology: definitional, development, and high volume manufacturing. With 14A, Intel is actively engaging with external customers during its definitional phase.
This engagement allows for discussions on design choices that should be made in H2 2026 or H1 2027, giving the company a better understanding of the technology’s trajectory to tailor investment decisions accordingly. Pitzer also stated that making the foundry business profitable is a priority, aiming for break-even profitability by exiting 2027 on a run-rate basis.
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