Lip-Bu Tan was previously on the board but left after disagreements:
> Over time, Tan grew frustrated by the company’s large workforce, its approach to contract manufacturing and Intel’s risk-averse and bureaucratic culture, according to the sources, who were not authorized to speak publicly.
> The current CEO was supposed to be a down to earth, technical, no bureaucracy guy as well.
Turning a ship the size of Intel is a super power in it's own right. Especially one with such a large entrenched bureaucracy as Intel has.
Politics aside for a moment - we're seeing the death bellows of many large, entrenched bureaucracies right now with DOGE - the main difference is the fight is in full public view instead of behind closed doors. We can only imagine and speculate at the resistance Pat and others met while trying to change Intel's course.
The infamous Oscar Wilde quote is very applicable: "The bureaucracy is expanding to meet the needs of the expanding bureaucracy." - Ever large bureaucracy eventually exists largely to preserve itself. This is why it is so incredibly difficult to reduce the size of a bureaucracy. Every member is convinced the organization will fail tomorrow if they are let go today, and every member fights/resists any and all changes that threaten their bureaucracy and the status quo.
Best of luck to Tan - I truly hope they succeed where many have failed at Intel. AMD needs a healthy Intel to drive motivation and competition. The world will be watching.
I do not live in the US, and I don't follow all that's happening too closely, but from what I hear it seems that most of DOGE actions are about eliminating people and cutting budgets, which may be a valid way to save money. This has nothing to do with bureaucracy.
If, to complete a process, you needed approval by three people and you still need the same approvals, the bureaucracy is untouched -- it will just take longer without people and money.
Bureaucracies are about process. Process require people, a ton of people if you have a ton of processes. If you can slim the processes, a.k.a reduce bureaucracy, then a ton of people can be let go. Also if you let go a ton of people, processes are forced to become more efficient. This becomes problematic only once your processes are reasonably optimized. The later is what I view is essentially the vision of DOGE, they say processes are not efficient. Letting people go should not meaningfully decrease the efficacy of these institutions in the long term.
> we're seeing the death bellows of many large, entrenched bureaucracies right now with DOGE
That's one interpretation, sure. I hope you'll concede that another equally valid one is that we're hearing the deliberate shattering of the only institution in the country capable of standing up to the oligarchs.
So far the verifiable cuts made by DOGE are less than a tenth of a percent of the federal budget. However, a lot of has been cut so far has been very favourable to the ultra rich. The most obvious ones being cutting the IRS enforcement budget
and gutting the CFPB.
It's possible to argue that all of that is good policy, but the facts make it very to claim that all of the destruction being wrought is going to make a meaningful dent in the government's spending.
Isn't a tenth huge? DOGE is brand new so I'm honestly surprised they have done so much.
Anyway at this point it's impossible to predict what will happen. There is no doubt a ton of inefficiency at these bureaucracies. You are making the point that cutting the budget will mean they will become less effective. But that doesn't follow if the departments are totally inefficient. Look at twitter. Musk fired like 80% of the software engineers. I'm not a heavy twitter user but I haven't noticed any difference in terms of reliability.
"we're seeing the death bellows of many large, entrenched bureaucracies right now with DOGE"
DOGE is just Musk bribing Trump into letting him settle scores and shut down agencies that are investigating him or that he doesn't like. Finding and eliminating "inefficiency" is just another one of Musk's myriad lies. I'm shocked at how many people still consider him to have any credibility at all.
The comment (despite protests to the contrary) injected politics unnecessarily and a bit randomly (there’s no particular reason to believe Intel and the US government are very similar).
It's really simple - either Intel is shipping products on 18A (Panther Lake and Clearwater Forest) by Q1 of next year or they are not, and their entire future hinges on this.
I'm not an expert in the silicon business, but I'm pretty sure the lead time is long enough that an incoming CEO has little impact on whether or not they are shipping a new architecture in less than 12 months.
Intel's valuation might hinge on it, but evaluating the CEOs success or not... that doesn't strike me as a great idea.
Agreed, and to the sibling comment who ponders if the new CEO is too late to influence this... He may be. But he needs to decide if he thinks it can be solved, and if not immediately push the fab business out. Even if it gets pushed out to bankruptcy or sold for $1.
I own some Intel stock so I sure hope it works, but they need to take urgent action if it's not...
He's supposedly quite low level, savvy about Platform Development Kits (PDK). Worked at Cadence, so he knows a lot about relating to other people making chips, selling IP, working with EDA tools.
A lot of potential here!
The disagreement with the board was supposedly related more to elements of the board trying to parts up and sell off bits of Intel. Harder to report that directly. Good for him, food sign if true.
Today was a very very good day to be hanging out on TechPoutine podcast. Very fun to have this as breaking news at the end of stream. https://www.youtube.com/live/aSoYz9Qp1xI
> That's what I'm trying to understand. His educational background was in Physics/Nuclear Engineering so he's obviously a smart guy, and he was CEO/Chairman of Cadence for 15 years, but other than that his 40+ year career has most been in VC and being on the boards of an incredibly large number of companies.
He is no Pat. He is no Andy. He is a business guy with some hard science behind (not electronics per se). It doesn't feel right.
>He is a business guy with some hard science behind (not electronics per se). It doesn't feel right.
I think you need to look up Cadence and look into how the fabless industry works. Picking him means Intel is possibly about to spin off or spin out the Chip division and only focus on Fabless.
My interpretation is that Intel didn't understand the customers of the fabless business and Tan does, so he's there to make Intel fabs attractive to them.
EDA companies have limited exposure to the inner workings of the fabless semi giants (Broadcom, Qualcomm, AMD). They have even less exposure to running a fab service for fabless companies.
EDA tool vendors have to work extremely closely with both fabless firms and fabs forever to tune their products to deal the ever increasing complexity of nanometer scale manufacturing processes. Backside power delivery? You bet your ass that the tools folks were involved in making that work well for designers. Gate-All-Around? Probably needed the tool vendors to make tweaks based on feedback from the fabs.
The important thing is that Lip-Bu is from the industry, and has contacts on the tools side of things as well as the customers for those tools which happen to be potential future customers for any Intel fab services. This is a step in the right direction for INTC which has a board where industry experience is severely lacking.
Anyone that's successfully been running hardware companies would be where I'd start. Offer the best of them much more money than they're currently making. Actually, hire a dream team of them. Turning Intel around would be worth paying a high price.
Maybe. It's a good start. The part where I'm unsure is that Cadence is one of the Big Three vendors. They have so much I.P., EDA tooling, patents, etc. that money will keep rolling in with incremental innovation.
Most hardware startups have to come up with new ideas, engineer good implementations of them, market them, and react to all kinds of competition. I'm talking companies like Habana or Cavium more than Cadence.
When I say hardware CEO, I meant one that ran a company like that where we know they'll be innovative and capable. Intel will need that since they're going to have to change so dramatically with so many product innovations. Whereas, running Cadence doesn't require (from what I know of them) that sort of innovation and it might have even hurt their entrenched position.
That said, I'm still positive about the new CEO. I hope his mindset and experience helps him do a lot of good. The letter he put out was great.
Sure he knew how to get there: build SOTA fabs that can compete with TSMC. The problem was that it was going to cost $100B and take 10 years. The board wasn't patient enough and wanted a quick fix. There is no quick fix.
>>The disagreement with the board was supposedly related more to elements of the board trying to parts up and sell off bits of Intel.
If true this would be very interesting. The most recent rumors were TSMC was trying to grab a part of Intel and have Nvidia/Broadcom/AMD take over the rest. Bringing in a CEO that literally left the board because he was against carving up Intel would be quite the signal from the board.
Cadence is a horrible company which just relies on monopolistic tactics rather than innovation to keep their position. Plus, their digital design tools are second grade.
That aside, he doesn't have fab experience. I guess that's very hard to come by, especially outside Taiwan and Korea.
If he wants to succeed, he will need to reconsistute the board. That's a tough one since they appointed him, but otherwise it won't work. The type of transformation Intel needs to go through won't withstand a myopic, short term oriented bureaucracy.
Unfortunately, index funds and mutual funds own about 68% of the Intel, with Vanguard retirement funds being the biggest. These passive custodian investor companies just vote along with the board's recommendation rather than making opinionated or activist decisions.
I’m with you except “unfortunately”. I don’t think we really want Vanguard trying to be an activist investor in all the companies they have major positions in.
It's a huge downside of passive investing. We lose a democratic element of corporate America by surrendering our votes to a couple big custodians that really don't care either way. I agree that I don't think Vanguard trying to make opinions on 1000s of company votes is the fix.
I think the post above you asks a relevant question - shouldn't Vanguard, rather than always voting with the board, just not vote at all? Wouldn't that be the truly neutral position?
> These passive custodian investor companies just vote along with the board's recommendation rather than making opinionated or activist decisions.
I don't know where you get that idea from. They own so many shares they have direct control over who gets appointed to the board, and unlike a small investor when these guys walk away with their money it hurts. I often see the news reports of them flexing their muscles in the board room.
It's true they probably don't have much to say about bets like 18A or corporate culture. But they will almost certainly be involved on the decision on if or when Intel will be split up - if only because these investors decide which, if any of the new entities they are prepared to fund.
> Together, we will work hard to restore Intel’s position as a world-class products company, establish ourselves as a world-class foundry and delight our customers like never before.
Sounds like he wants design and foundry to stay together.
There will be a all-hands in the next few weeks, supposedly. I hope whoever sees this reply, if you are in a position to do so comfortably, ask him straightforwardly whether he has or has heard about a plan to knife and sell INTC in the next 18 months.
Intel employees are at high risk of losing their jobs. I don't think cornering the new CEO at an all-hands is a good idea. And I wouldn't even trust his answer, anyway.
Of course you cannot trust it. If you are working in a publicly traded company (as an ordinary employee) you never hear strategic changes first from your management. They have to make a filing to the stock exchange before they tell you.
I read through some posts and found this, after Gelsinger was fired:
>It’s over.
> If corporations are people, then Intel has decided to commit suicide and sell its vital organs.
Yet now the same guy seems more positive ("The best outcome has happened.... Lip-Bu Tan lacks the critical flaw that Gelsinger had… excessive kindness").
> A tsunami of decapitation (headcount reduction) is coming. However unpleasant the last several years has been… what is coming will be much worse.
> This will be a disorderly decapitation frenzy. Nobody is safe.
Did that happen? If not, did he say why he was mistaken? If not, then is this guy not overconfident and incapable of revising his own priors?
> Did that happen? If not, did he say why he was mistaken? If not, then is this guy not overconfident and incapable of revising his own priors?
The author thinks that it's about to happen, so it's too early to expect any revision. In that earlier post they said that Lip-Bu Tan resigned from the board because he wanted to reduce headcount more than Gelsinger, and that in their opinion hiring him and carrying out that reduction would be the best outcome for Intel.
Given that Lip-Bu Tan got hired, I think it's reasonable to expect some reductions soon. Before this the author listed a couple of possible outcomes, and as I understand it, Lip-Bu Tan and his reductions are described as one of the less chaotic and "unpleasant" options for Intel, because his cuts would be more specific than cuts that would be the result of splits/mergers/bankruptcy.
On the contrary, because he was leading Cadence it looks like he will at least spin off the fabs. The major card Intel had against competitors was the integration. The tick-tock model.
The failure of Intel is in the board and terrible middle-managers. If Intel becomes fabless like AMD it will be left with the worse parts. They will make money in the sale but there will be nothing left.
Intel had a lot of cool tech recently like Optane and QAT. The failure to get market adoption lies squarely in management. Can you believe they put in-chip yearly licenses to enable QAT, that's INSANE (what if they 10x the license price next year?). And of course, almost zero reach out to open source. Only a PoC and calling it a day.
IMHO, Intel should concentrate in their core strengths. Fire most of the managers, get rid of the toxic board. Open all they can and invest heavily in documentation and software, guided by the community. But this is not going to happen. The board is firmly in place.
Understanding everything it takes to design a chip, after spending 15 years leading the company that makes software tools for chip design, perhaps.
Cadence Design Systems, that is. I worked there for a couple of years on computational lithography/optical proximity correction software that we licensed to TSMC and Micron. If you don't know about Cadence, well, you don't know about silicon.
Some of the biggest EDA tools come from companies that use them for a reason (NX by Siemens, CATIA by Dassault, ...).
Those are the same reasons that make Lip-Bu Tan a great choice for the position.
That's what I'm trying to understand. His educational background was in Physics/Nuclear Engineering so he's obviously a smart guy, and he was CEO/Chairman of Cadence for 15 years, but other than that his 40+ year career has most been in VC and being on the boards of an incredibly large number of companies.
>he was CEO/Chairman of Cadence for 15 years, but other than that
Oh, so he's only been leading one of the handful of companies making the full software suite for all stages of silicon design and simulation for 15 years, no biggie.
You're aware what kind of company Cadence is, are you?
I know, right? John Sculley ran the, at the time, most successful computer maker, Apple, for 10 years. Brian Krzanich ran the, at the time, largest chip maker, Intel, for 6 years. They were the authorities; their decision-making and abilities running businesses in those industries must have been impeccable to do so for so long.
Thank you for agreeing with me that “years experience in industry” has numerous examples both ways for efficacy and is thus insufficient support for snide assertions of fitness for position as the person I was responding to was making.
I feel Intel is in a similar situation as IBM in the 90s when Gerstner came in. You don't necessarily need a super technical CEO but somebody who is forceful enough to see through his initiatives. Not sure if the new guy is that type though.
I am not sure if Intel can survive on its own. Games changed quite a bit and Nvidia is about to enter the space and will likely gain significant shares if they bundle their products in anticompetitive ways. It will be cutthroat for both Intel and AMD. But if he pulls it off, he will go down in history as the guy who saved Intel.
They certainly need to make chips for others to retain the scale needed to make chips.
As far as x86 goes, it's not as sexy as GPUs or mobile chips but they're still selling a ton of x86.
It seems that Lip-Bu Tan resigned on his own, because he disagreed with the direction of the board and Gelsinger. Given that they fired Gelsinger and hired Lip-Bu Tan, it seems that they now think his direction may be better for Intel.
> Over time, Tan grew frustrated by the company’s large workforce, its approach to contract manufacturing and Intel’s risk-averse and bureaucratic culture, according to the sources, who were not authorized to speak publicly. (...)
> To cut costs, Intel announced in August layoffs of more than 15% of its workforce (...). The layoff plan was one source of tension between Tan and the board, according to sources. Tan wanted specific cuts, including middle managers who do not contribute to Intel's engineering efforts.
> Gelsinger, who took over in 2021 as part of a turnaround plan, added at least 20,000 employees to Intel's payroll by 2022. To Tan and some former Intel executives, the workforce appeared bloated. Teams on some projects were as much as five times larger than others doing comparable work at rivals such as AMD, according to two sources. One former executive said Intel should have cut double the number it announced in August years ago.
A few years after the first battle over Taiwan has taken place.
There has been news about Broadcom and NVidia testing their designs on Intel process nodes. Which is arguably worse in at least two respects, they are behind TSMC in density and also proprietary software tooling at Intel. After the 13000/14000 CPU chip death issues possibly also in regard to reliability. But they still want to do it.
Although this page in the history books is not yet written, companies hedging their bets this way is a really bad sign.
> A few years after the first battle over Taiwan has taken place.
Awful but true.
> There has been news about Broadcom and NVidia testing their designs on Intel process nodes.
Links? It makes sense to invest in second and third sources, even if it does mean handing money to a competitor. Especially given the instability of the global community right now.
Yes, and also 0x.
I'd say they are equally likely.
2x or 0.5x seem most likely to me.
I own shares at about $20. It's my gamble since I don't casino or sports gamble :-)
> Over time, Tan grew frustrated by the company’s large workforce, its approach to contract manufacturing and Intel’s risk-averse and bureaucratic culture, according to the sources, who were not authorized to speak publicly.
https://www.reuters.com/technology/intel-board-member-quit-a...