Global chip-making firm Intel is geared to release its quarterly results this week which will give the market clear insights into the new CEO Lip-Bu Tan’s plan for the company to turn around its fortunes.
Tan, an accomplished technology leader with deep semiconductor industry experience, was appointed the company’s CEO effective March 18, succeeding interim co-CEOs David Zinsner and Michelle Johnston Holthaus, tasked with a mandate to reverse years of underperformance at Intel.
Investors are already warming up to Tan as positive signs start to show
According to Reuters, investors are upbeat about seeing early signs of the new CEO reversing years of slip-ups at the chip-making firm. The company is set to report its fourth consecutive quarterly decline in revenue on Thursday.
The company, which used to be a dominant player in the global chip market, has been losing ground to competitors like AMD in personal computer and data center chip markets. Nvidia has capitalised on that and jumped ahead of peers to become a force in the AI industry.
“The most important thing for Intel now is Lip-Bu Tan’s playbook… How he can give investors confidence that he is the person who can turn Intel around and whether a turnaround is possible in the first place.”
Hendi Susanto, portfolio manager at Gabelli Funds, which holds Intel shares.
Tan took over the reins of the company with a mess on his hands at the firm, but experts believed he was not likely to spin off the company’s struggling foundry arm in the near future.
But, he could quickly inject funding into the company through a rumoured partnership with Taiwan’s TSMC and government.
The company’s former CEO, Pat Gelsinger, reportedly led several efforts to turn around the company, including layoffs and promising AI chips that could compete with those from Nvidia and AMD. He was, however, relieved of his job for failing to meet targets.
The US-China trade standoff makes Tans’ intel job challenging
Tan has already streamlined the company’s leadership structure, with key chip groups now reporting directly to him, according to a previous Reuters report. This is seen as a critical aspect of Tan’s strategy, as he seeks to refocus the company’s business as well as free up some cash for other costly investments essential in the chip-making business.
The company’s AI plans remain fluid as it relegated its Falcon Shores graphics chips to internal testing, which, according to Reuters, left it without a competitive flagship in the booming AI market.
Apart from inheriting a struggling company, Tan’s job is worsened by the escalating US–China trade standoff, complicating the geopolitical tensions already existing between the two superpowers.
So far, semiconductors have been spared from the US tariffs, although President Donald Trump has already warned that additional sector-specific tariffs could be announced in the coming weeks.
China has already responded with threats of its own. According to Reuters, UJS-made chips could face tariffs of 85% or more based on a notice from the state-backed China Semiconductor Industry Association earlier this month.
Accounting for a third of Intel’s revenue, China was Intel’s largest market in 2024.
Now, analysts think Intel could still benefit in the first quarter from manufacturers who are pulling PC shipments in anticipation of the tariffs. According to Canalys data, global PC shipments rose 9.4% in that period.
Meanwhile, Intel’s PC unit is expected to register an 11% revenue decline for the March quarter while the data center business is expected to post a 1% decline, making it its 12th straight fall.
According to data by LSEG, revenue is seen falling 3.4% during the quarter, while loss widens to nearly a billion dollars.
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This articles is written by : Nermeen Nabil Khear Abdelmalak
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