Analysis: New Intel CEO Tan To Bring Foundry Expertise to Embattled Chipmaker

TaiwanPlus News

TECHnalysis chief analyst Bob O'Donnell tells TaiwanPlus how new Intel CEO Lip-Bu Tan can push the embattled U.S. semiconductor giant back to the top through foundry and industry expertise.

Transcript

00:00Bob, I want to start off asking, what do we know about Intel's new CEO, Lip Butan?

00:06So Lip Butan is a semiconductor industry veteran.

00:11So he has been on the board of Intel for several years, but one of his most prominent roles

00:16was he was the CEO of Cadence.

00:19Now Cadence is a company that creates tools that are used to design chips.

00:26So the beauty of that, and the reason why I think he's a really good match for Intel,

00:31is this means he understands both the chip manufacturing side, which of course being

00:36the foundry side of the business, as well as the chip design side, which is the product

00:42side of the business.

00:43So in my mind, what he brings to the job is A, a great deal of knowledge and understanding

00:50of Intel, B, a huge amount of industry experience and connections, and C, knowledge of the critical

00:59areas that Intel, I think, is going to continue to move forward in.

01:02So in my mind, this should get rid of some of the questions like, oh, are they going

01:07to sell off the foundry or what are they going to do?

01:09I think he's going to continue to focus on both of those things.

01:13One of the interesting things is that he was previously on the board of Intel, but he left

01:17last year over disagreements with the direction of the company.

01:21And now he's coming back as the CEO.

01:23So what does this say about the direction that Intel is heading?

01:28There's been a lot of debate about exactly what the board was trying to achieve.

01:34And then the conflicts, of course, that they ended up having with Gelsinger.

01:38So hard to know exactly for sure what the differences that Liput had back when he left.

01:48Clearly, he had a vision for the company that obviously drove him to feel the way he did.

01:55And so I think we're going to see him try and deploy that vision when we'll find out

02:01more details moving forward.

02:03But certainly, if you look at the initial comments he made in the press release, it

02:07suggests very strongly, like I said, that they're going to continue moving forward on

02:11the foundry side and they're going to continue on the product side, which I think they need

02:16to do.

02:17It's a long-term process.

02:21It's not going to happen overnight.

02:23And with this being a long-term process and him being a veteran of the chip industry,

02:28where do you think Intel is in three to five years?

02:32What are we talking about when we say Intel then?

02:34I think it means that Intel kind of returns to some of its former glory if they can execute

02:42properly.

02:43They're seen both as a process manufacturing leader as well as a product leader.

02:52And I think they've lost ground, unfortunately, on both sides.

02:56And of course, TSMC has been the big winner in terms of the process technology.

03:03But Intel's been really working hard.

03:06And I give Gelsinger a lot of credit, Gelsinger being the former CEO, in driving towards

03:11improving their process technology.

03:13Again, I think Intel lost their way on that.

03:16And yet that was a critical differentiator for them.

03:19And everybody ended up moving a lot of their business, of course, to TSMC.

03:23Not that Intel had much of an external foundry business, but for them to even be considered

03:29a reasonable alternative to TSMC, they needed to be as good as, if not a little better.

03:34Now, coming back to your original question, three to five years, at that point, we may

03:39see Intel build up the foundry business enough that they end up selling it off as an independent

03:45entity.

03:46That would not be a shock.

03:47There's been discussions about that.

03:49They're just not in a position to do that just yet.

03:51Reuters earlier reported that TSMC and other manufacturers would be interested in a joint

03:57venture with Intel.

04:00So with that in mind, then, what you just said about Intel's future, do you think that

04:05reported deal might still be on the table?

04:08Or are we looking at that as probably no longer an option?

04:12I'm guessing that's no longer an option.

04:14And I think that's part of the reason why the market reacted well, because all of a

04:20sudden, it gives more of a clear vision for Intel.

04:23There's been a lot of uncertainty around the company ever since, well, for several months,

04:29several quarters.

04:31Not just having Gelsinger leave, but also, frankly, their financial reports, because

04:37they had to write down the assets of the foundry dramatically.

04:41And that has a huge impact on their profitability, which in turn impacted their stock price.

04:46And it just raised a lot of questions in the industry.

04:50Intel was the stalwart of the largest semiconductor company in the world for a very, very long

04:56time.

04:57And it's been a real challenge to see them go through the challenges that they faced.

05:03But I believe that with this move, we're going to see discussions around JVs and other things

05:09go away.

05:10Still a lot of questions about what's going to happen with the CHIPS Act here in the US.

05:14And hopefully, that isn't impacted.

05:15But that's yet another factor that may come into play.

05:18And frankly, another factor that may have influenced Lipu to come back.

05:24All of these things are all going on simultaneously.

Category

Transcript

Recommended