Home > Latest News > Divisions In Intel’s Board Over Chipmaker’s Revival Plan

Divisions In Intel’s Board Over Chipmaker’s Revival Plan

Intel is on the back foot. It has lost more than half of its share value in the last six months, announced plans to cut 15,000 jobs and has said that sales for the current quarter would be $12.5 billion (A$19.27 billion) to $13.5 billion (A$20.81 billion), less than what analysts had precited would be $14.38 billion (A$22.17 billion) on average.

As it struggles to compete with its rivals and present a clear roadmap for revival, divisions are beginning to fracture its board. Lip-Bu Tan, a semiconductor industry veteran, has confirmed that he is leaving the board.

Tan’s exit is a big blow to Intel. He joined the company’s board two years ago and was tasked with restoring Intel’s place as a leading global chipmaker. In October 2023, the board authorised him to oversee manufacturing operations.

However, gradually, Tan grew frustrated by Intel’s large workforce, its approach to contract manufacturing and Intel’s risk-averse and bureaucratic culture, reported Reuters.

Although Intel announced in August layoffs of more than 15 per cent of its workforce, the layoff plan was reported to be one source of tension between Tan and the board. Tan wanted specific cuts, including middle managers.

Teams on some projects were as much as five times larger than others doing comparable work at rivals including Advanced Micro Devices. Tan is believed to have told sources that Intel was overrun by bureaucratic layers of middle managers who hampered progress at Intel’s server and desktop chips divisions.

Intel’s workforce is larger than those of Nvidia and Taiwan Semiconductor Manufacturing combined, with sources arguing that the August cuts should have been undertaken as far back as two years ago.

Intel’s turnaround plan is backed upon it building its foundry business, which helps other companies manufacture chips, similar to TSMC. But the company has yet to disclose a big customer and has said the business is not expected to turn a profit until 2027.

Intel, historically a maker of its own chips, is reported to lack the expertise to work with external customers, which it has struggled to attract.

Tan is believed to have become frustrated as the board did not follow his recommendations over how to make the manufacturing business more customer-centric. Intel has though continued to build new factories in Ohio, Arizona and Europe without naming new customers.

Officially, Tan has cited other reasons for leaving Intel. He attributed it to a personal decision to “reprioritize various commitments” and that he remained “supportive of the company and its important work.”

Questions are now swirling about Intel’s current performance will open it to activist shareholder attacks. Former Intel executives told Reuters the company began preparing for a potential activist threat months ago. The company has reportedly hired investment bank Morgan Stanley to prepare a defence.



Popular Posts

‘Can You Describe What You See Ahead?’ Google Maps, Waze Integrate Gemini AI
Latest News
/
/
Samsung Galaxy Z Fold6 (Image: Supplied by Samsung)
Will Samsung Drop Its ‘Galaxy’ Branding For The S25 Series?
Latest News
/
/
Wesfarmers Defends Big Profit, Says Pollies Should Show Some Love
Latest News
/
/
Intel
Struggling Intel Hints At Turnaround With Optimistic Forecast
Latest News
/
/
Easy Streaming Revenue Pours In At Universal Music
Latest News
/
/

Digital Magazines

Recent Post

‘Can You Describe What You See Ahead?’ Google Maps, Waze Integrate Gemini AI
Latest News
/
//
Comments are Off
The data is mind-boggling. Every month, around two billion people on the planet use Google Maps – for work, play,...
Read More