Intel’s (relatively new) CEO has admitted the severity of the struggles that the company is currently facing.
The Oregonian reported on a recording of Tan’s Q&A session ( Take these quotes with caution, then. But we’re told that Tan observed: “20, 30 years ago, we are really the leader. Now I think the world has changed. We are not in the top 10 semiconductor companies.”
It’s a frank admission, and one of many that were made here.
Take these quotes with caution, then. But we’re told Tan made the following observation:”20, 30 years ago, we are really the leader. Now I think the world has changed. We are not in the top 10 semiconductor companies.”
This is a frank confession, and it’s one of many. Tan said the layoffs at Intel are the beginning of a marathon’ to make Intel more agile and nimble, like its rivals AMD and Nvidia. Intel must be humble now.
Tan said that “there’s a lot of work to do” was a necessary step to recover from losing market share in data centers (where AMD’s Epyc chip has been making significant headway).
Intel is having a tough time
Intel, of course, has faced multiple problems over the years. The most thorny of these, in the eyes of consumers, are the various misfires around Team Blue’s recent desktop processors. Intel’s reputation has been tarnished by the instability of previous-generation CPUs as well as the disappointing performance of current-generation Arrow Lake chips when it comes to gaming.
Tan noted that Intel’s PC division is “doing a bit better” however, it was necessary to strengthen its architecture so that it could meet the demands of “advanced computer” and AI is a key area.
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Tan was once again honest about Intel’s failure in the AI market, saying: “On [AI] training I think it is too late for us,” because Nvidia has only “too strong” at this stage, which is obviously the case. Tan sees an opportunity for Intel to gain a foothold in edge AI. This means bringing AI directly to devices, rather than accessing it via the cloud. The CEO enthuses: “That’s an area that I think is emerging, coming up very big, and we want to make sure that we capture.”
Another big opportunity for Intel, going by Tan’s playbook-in-the-writing, is agentic AI, the likes of chatbots that can autonomously handle tasks – at least to an extent. We’re looking to proactive AI that takes action towards goals set (rather then reactive bots) in the future.
Intel is reportedly making some major hires to advance its AI ambitions. Three new vice presidents have been brought in to better tap into AI.
Analysis: A defined (in theory) vision – and a brutal clarity
Tan has no illusions about the task that lies ahead. His words reflect this (again with the caveat to be appropriately skeptical around these quotations). Intel’s turnaround will not happen quickly, and the road to recovery can be brutal.
Previously, The Oregonian (OregonLive), had reported that 529 Intel employees would be laid off in Oregon next week. Other job losses were also reported in California, Arizona and Israel. None of these have been confirmed publicly. Manufacturing jobs will be cut by as much as 20%. Marketing is being outsourced and shuttered. The automotive division will also be shut down.
Okay so this is still rumor, but it feels like there’s more clarity and realism in the current situation compared to Pat Gelsinger (the former CEO of Intel). As noted, it is a difficult decision to focus on streamlining, but refocusing to some degree is necessary. Intel is in trouble. Its latest architecture, the 18A Process, is rumored not to be doing well. Team Blue has switched to promote its successor, 14A.
AI, too, is a valuable target to capitalize on. Tan’s plans sound realistic. They are not to catch Nvidia but to carve out Intel’s own territory when it comes to on-device AI. Intel’s next-generation desktop processors – Arrow Lake Refresh, in theory – are expected to arrive later this year. According to rumor, Intel will be focusing on implementing an NPU (chip) that is much more powerful. This could enable Copilot+ to be available on desktop PCs for the first ever time, as I discussed in greater detail elsewhere.
It seems that some of the pieces are already falling into place. It will be interesting to see what Tan says and how he uses them in future earnings calls and official statements. We’ll also watch to see if this more humble and realistic way of thinking emerges.
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Darren writes news and features on a wide range of computing topics, including CPUs and GPUs, other hardware, antivirus, VPNs and more. He has been writing about technology for over three decades and also writes books during his spare time. His debut novel, ‘I know what you did last supper’ was published by Hachette UK.
