Currently in the process of rolling out a new wave of redundancies – it’s been reported that up to 20% of manufacturing roles will be lost this month – Lip-Bu Tan is said to have told staff that Intel, which had led the industry 30 years ago, now trails behind key rivals including the likes of NVIDIA, Broadcom, and AMD.
Only yesterday NVIDIA saw its market value surge, albeit briefly, above $4 trillion, while Intel’s valuation has plunged halving in 18 months to just $100 billion.
By contrast to Intel’s struggles, TSMC has reported second quarter revenues of $31. 9 billion up 38.6% over the course of the year, and ahead 40 per cent to reach $60 billion across January to June. This has been driven by demand for AI and HPC, which accounted for about 59% of revenue up from last year’s 46%.
According to Tan, Intel will be unable to catch up with NVIDIA’s lead in AI model training and so will be shifting its focus to edge AI, which delivers intelligence directly to devices. Intel will also be exploring agentic AI, which is rapidly growing field where AI systems operate independently without constant human guidance.
In terms of the company’s approach to its 18A node, it has been reported that while Tan may be in favour of shifting Intel’s focus to the14A node for new foundry clients, he has reportedly said that Intel’s primary goal was to make sure 18A was ‘solid’ for internal use – only then would the company start looking at 14A.
Intel has announced plans to cut 529 jobs in Oregon by mid-month, with hundreds more already in progress across California, Arizona, and Israel. More cuts are expected.
Sources are also suggesting that Tan may not only be considering a major strategic shift for Intel Foundry but also mulling about its $28 billion Ohio plant now under construction.
Intel’s first Ohio factory, originally set for 2025, is expected to be delayed by at least five to six years, opening in 2030 or 2031, while the second Ohio facility won’t be ready until 2031, with operations starting in 2032.