During his first public appearance as the new CEO of Intel Corp., Lip-Bu Tan implored the chip giant’s customers to keep being honest and critical of him as he proceeds with his objectives to bring the company back to life.
Investors are curious about whether Intel (INTC) will stay a single firm or if Tan intends to spin off its chip product lines or its own manufacturing company. Tan did not explicitly address these questions. However, Tan stated that Intel has a large work ahead of it in a 45-minute speech at an Intel customer conference in Las Vegas. He made references to everything from Golden State Warriors basketball to Henry David Thoreau to some obscure former Intel executives.
“It is very clear,” Tan stated, citing numerous preliminary discussions he has already had with clients, “that we have a lot of work ahead.”
He restated an earlier declaration he made upon being appointed CEO, promising that Intel will revert to its foundation as an engineering-focused business. Tan, 65, said that his love for Intel is the reason he accepted the position at this point in his career. “It was very hard for me to watch this struggle,” he stated. “I simply could not stay on the sidelines.” Tan abruptly left Intel’s board last August after serving there before.
He added that he learned a valuable lesson from his turnaround at Cadence Design Systems (CDNS), where he had previously served as CEO: pay close attention to what customers have to say.
“Please be brutally honest with us,” he responded. “I believe harsh criticism is more valuable.” In addition, he cited Thoreau, the transcendentalist and New England naturalist, who urged for truth “rather than love, than money, than fame.” Tan stated that he wants his clients, associates, and even his spouse to “give me the truth, then we can go together and fix problems and move forward as a team.”
His objectives for Intel include restoring the company’s sense of startup, giving its engineers greater latitude to express their creativity, and making the team as cohesive as the Warriors, a basketball team that frequently passes the ball without even glancing at one another. “This is the kind of team I would like to build at Intel,” Tan stated.
He restated Intel’s earlier announcement that a high-performing chip code-named Panther Lake will be the first product from its newest manufacturing process, known as 18a, later this year. Tan also expressed dissatisfaction with Intel’s position in the AI space and stated that he thinks the company needs a more robust product in the data-center sector.
“I have heard the feedback loud and clear,” he stated. “We need to start over and strive for a more competitive system. Although it won’t happen right away, I’m confident we can get there.
Stacy Rasgon, an analyst at Bernstein Research, wrote to clients, “To be honest, it sounded more like an apology than anything else.” He stated that Tan “genuinely seems eager for ‘brutally honest’ feedback from customers and partners as he tries to right the ship; we hope he gets it.” Rasgon clarified, however, that Intel is “in for a slog as he tries to fix myriad issues around product and process, and attract and satisfy customers.”
Tan pointed out that the board had only asked him to serve as CEO for three months when he joined on to help Cadence through its turnaround. However, he remained for 15 years. “As long as the company needs me,” he declared on Monday.
