Intel NASDAQ: INTC Chief Executive Officer Lip-Bu Tan said the company has made progress on strengthening its balance sheet, improving execution and rebuilding customer trust, while acknowledging that its foundry ambitions remain a long-term effort.
Speaking with J.P. Morgan semiconductor analyst Harlan Sur at the firm’s 54th Annual Technology, Media and Communications Conference, Tan reviewed the priorities he laid out after taking over as CEO in March 2025: improving products, building a full-stack systems approach, creating a trusted foundry business and shoring up Intel’s financial position.
Tan said Intel’s balance sheet was a top early focus, describing it as “pretty horrible” when he arrived. He said the company received support from the U.S. government, NVIDIA and SoftBank. Tan said Commerce Secretary Howard Lutnick and President Donald Trump gave him an opportunity to explain his vision, after which some CHIPS program funding was converted into equity. He also referenced NVIDIA’s $5 billion investment and support from SoftBank founder Masayoshi Son.
“I think overall, I think strengthen our balance sheet. I think that’s very important,” Tan said.
Foundry Effort Focuses on Trust, Yields and Roadmaps
Tan said Intel’s foundry strategy depends on convincing customers that the company can deliver wafers reliably and at high quality. He described foundry as a service business that requires not only yield improvement and lower defect density, but also timely delivery, process design kits and the right intellectual property for different end markets.
For Intel 18A, Tan said the company is making “great progress,” with Panther Lake relying on the node. He said Intel announced 200 design wins at CES and is now able to support those customers with product volume.
Tan also said Intel 14A is progressing. The company released a 0.5 process design kit in the first quarter, allowing customers to build test chips and evaluate yield. He said the “Holy Grail” is the 0.9 PDK, which Intel is targeting for outside customers in October, with internal customers getting access earlier.
Tan said multiple customers are engaged with Intel on 14A, though he added that the company will not disclose customer names unless customers choose to announce the relationship themselves.
Later in the discussion, Tan said Intel 18A yield has improved by about 7% per month and is ahead of the company’s year-end target. He said Intel 14A risk production is planned for 2028, with volume production in 2029, which he said is around the same timing as TSMC’s A14. Tan said Intel is also working on future 10A and 7A roadmaps because customers want to see a long-term manufacturing path.
Management Structure and Engineering Culture
Sur asked Tan about his decision to flatten Intel’s organization. Tan said some parts of Intel had as many as 12 layers of management, which he wanted to reduce to five to improve accountability and decision-making speed.
Tan said he has pushed to reduce unnecessary meetings and move Intel closer to a startup-style operating model. He said customer complaints must be surfaced quickly, and he expects bad news to be reported within 24 hours.
“Bad news, tell me first,” Tan said. “If you have tell me the bad news, it’s our problem. We fix it together.”
Tan also said engineers now have more direct access to him and that he sometimes goes several layers down in the organization to get accurate information. He said he has changed performance-review expectations so that outstanding ratings are tied to company performance.
Product Strategy Includes More Outside IP and Tools
Tan said Intel historically relied too heavily on internally developed intellectual property and design tools, even in areas where there was no competitive differentiation. He said the company should use industry-standard tools and IP unless Intel has a clear reason to build something internally.
Tan said he hired Srini from Cadence to run central engineering and consolidate design and EDA-related efforts. He said Intel had five different organizations with separate EDA efforts and budgets, which he viewed as inefficient.
He said Intel is also working more closely with major EDA partners and highlighted that leaders from the EDA industry participated in Intel Foundry events.
AI Workloads Seen Boosting CPU Demand
Tan said agentic AI is increasing the importance of CPUs in data centers. He said training workloads were previously closer to one CPU for eight GPUs, but that customer feedback for agentic AI and inference points to higher CPU intensity, with some customers discussing one-to-one ratios and others even describing four CPUs for one GPU.
Tan said CPUs are useful for reinforcement learning, orchestrating different agents and optimizing workloads. He also said physical AI could be the next major frontier, with opportunities in areas such as robotics, digital workers, embedded systems and edge applications.
He said Intel is working on new CPU architectures for purpose-built workloads and also has accelerator plans, including its partnership with SambaNova. Tan said Intel should not simply try to catch up in crowded areas but instead focus on opportunities where it can differentiate on performance, power or software.
Tan also cited memory and high-speed connectivity as key system-level issues. He said memory has become a bottleneck and that Intel is working with memory companies while also seeking talent in that area.
Advanced Packaging and Customer Commitments
Tan said Intel is seeing customer interest in its advanced packaging technology, including EMIB-T. He said customers have expressed enough interest that Intel asked whether they would help with substrate prepayments amid supply shortages.
“They jump on it,” Tan said, adding that the commitments were not “few million” dollars but “billions in the next few years.”
Tan said advanced packaging, foundry services and new CPU architecture could position Intel to pursue ASIC business for customers that need purpose-built chips with fast turnaround times and optimized performance.
About Intel NASDAQ: INTC
Intel Corporation, founded in 1968 by Robert Noyce and Gordon E. Moore and headquartered in Santa Clara, California, is a leading global designer and manufacturer of semiconductor products. The company is historically notable for introducing the first commercial microprocessor and for driving the x86 architecture that underpins many personal computers and servers. Intel's core business spans the design, fabrication and marketing of processors, chipsets and related components for a wide range of computing applications.
Intel's product portfolio includes client and mobile processors marketed under brands such as Intel Core and Pentium, as well as high-performance Xeon processors for data centers and cloud infrastructure.
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