TMTPOST -- Intel Corporation shares rose as much as 87% and settled 6.8% higher on Monday. Shares jumped to their highest since February 20 on new CEO Lip-Bu Tan’s reported shakeup of the chipmaker’s manufacturing and artificial intelligence (AI) strategy.
Credit：Intel
Tan, which is poised to take charge on Tuesday, has mulled plans to overhaul Intel’s chip manufacturing methods and AI strategies, Reuters quoted sources familiar with new CEO’s thinking on Monday. The reported plans, that Tan has been formulating and still could change, involve restructuring Intel’s approach to AI and layoffs since he thinks the company has become slow-moving with a bloated middle-management.
According to the report, Tan’s aim in the near term is to enhance Intel Foundry, a segment that is responsible for building chips for both the company and third party contractors and other design companies like Microsoft Corporation, by aggressively wooing new customers. The company will also restart plans to produce chips for AI servers and look to areas beyond servers such as software, robotics and AI foundation models, per the report.
Intel Foundry became a hot headline these days as the Trump administration is seeking to revive the company while maintaining American control. For Trump, who aims to make America great again, to boost Intel can help move production back U.S. and make the country a leader in the advanced chipmaking. Intel is the largest chip manufacturer of the United States. The country marks up just 12% of the global chip production, down from 37% in 1990.
Trump has been reportedly pressuring Taiwan Semiconductor Manufacturing Co. Ltd (TSMC) to take over and manage Intel’s plants. The DigiTimes reported late February that the U.S.government has offered TSMC three options. Under the first proposal, that TSMC would build an advanced packaging facility in the US, offering integrated services from wafer manufacturing to back-end processing locally. The second involves a joint venture led by the U.S. government. It requires TSMC along with several major companies to invest in Intel’s standalone foundry business under a joint venture, and the venture would facilitate a technology transfer from TSMC. The last proposal is to allow Intel to assume future packaging contracts from U.S. customers that TSMC has secured, such as like Apple Inc., leveraging Intel’s advanced packaging capabilities.
Amid the Trump administration’s drive to reinforce the domestic “Made in America” policy and implement measures to ensure Intel’s survival, TSMC is being cited as virtually the only solution, according to industry sources.
TSMC has pitched a group of semiconductor companies including Nvidia Corporation, Advanced Micro Devices, Inc. (AMD) and Broadcom Inc. on running Intel’s foundry business through a potential joint venture, Reuters reported last Wednesday.
Under TSMC’s proposal, the world’s top semiconductor foundry would be the only operator of Intel’s foundry factories that is based outside U.S. and hold not more than 50% of the potential venture, considering U.S. President Donald Trump has implied discomfort with foreign entities’ ownership of American companies, per the report. If the report is accurate, Nvidia, AMD and Broadcom are likely to be other operators of the potential venture and get stakes in it.
Wednesday also saw Intel announced Tan, a veteran tech investor of Chinese descent and semiconductor industry executive, would serve as new chief executive. In an email to all employees following the announcement, Tan said there is “a truly unique opportunity to remake our company at one of the most pivotal moments in its history.” He vowed to restore Intel’s position as a world-class products company, build it as a world-class foundry and work to “delight customers like never before.”
Intel disclosed last Friday that Tan intends to buy about $25 million in stock from the company within 30 days of assuming the CEO position. That purchase, reflecting Tan’s confidence on the company’s future,could send a positive signal to investors.
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