E=MC Tan Squared: Can Intel's New CEO Unlock the Foundry Fortune?

A New Equation: Tan Enters the Quantum Realm of Intel

Greetings fellow thinkers! It is I Albert Einstein observing the fascinating developments in your world from beyond the veil of space time. I must say this news about Intel and their new CEO Mr. Lip Bu Tan is quite intriguing. Apparently this Tan fellow has quite the Rolodex like nobody else's in the semiconductor industry. Reminds me of my own little black book back in Zurich... filled with physicists mathematicians and the occasional patent clerk. Now Intel seems to be facing a bit of a 'relativity' problem – their position in the market has shifted quite a bit since their glory days. They've lost 70% of its value since early 2020! As I always said 'The only thing that interferes with my learning is my education.' Perhaps Intel needs a new kind of education a new approach to solve the equation of their declining relevance. The company wants to pivot into chip manufacturing and needs government funding. This reminds me of the Manhattan Project and the need for new ideas to be explored.

Chasing the Light Speed of Innovation

Ah the challenge of staying relevant! Intel is trying to change the industry's perception of them. No longer the dominant player in semiconductors Intel is trying to pivot into chip manufacturing especially as the U.S. focuses on investing in onshoring critical technologies. It seems Mr. Tan is trying to recapture that lost light speed to accelerate Intel back to the forefront of innovation. But let's be frank turning around a company of that size is like trying to push the Earth out of its orbit very slowly and with lots of inertia. Still 'The important thing is not to stop questioning.' So I applaud Mr. Tan for asking the right questions and understanding what the customers want. Under Tan’s predecessor Pat Gelsinger Intel spent $90 billion between 2021 and 2024 on building the company's foundry operations and unlocking additional U.S. government funding.

The Uncertainty Principle of Chip Manufacturing

This 'foundry business,' as they call it operates on a 'different time scale' and with 'a level of investment that is tough to stomach.' As I said 'The hardest thing to understand in the world is the income tax.' So I can only imagine how difficult and complex the finances of a large organization is and the complexities of chip manufacturing capital plans and the like. The company's central processors or CPUs that for decades were the most expensive and important part in computers have been supplanted by AI chips. So in the realm of chip manufacturing it's not just about speed; it's about direction purpose and a little bit of luck. Like trying to predict where a quantum particle will appear next.

From Nuclear Engineering to Semiconductor Symphony

Mr. Tan's background is quite diverse from nuclear engineering to venture capitalism and now leading Intel. It's like going from splitting atoms to assembling tiny electronic brains! Before joining Intel he was CEO of Cadence which makes electronic design automation or EDA software. As a venture capitalist at Walden International Tan invested in Semiconductor Manufacturing International Corporation. In an industry where roadmaps and capital plans are measured in five year increments Tan is under pressure to start building confidence immediately. As I always say 'A person who never made a mistake never tried anything new.' Mr. Tan's diverse experiences and insights might just be the secret ingredient Intel needs to find new paths.

Seeking the Grand Unified Customer

The key it seems is to land a 'big foundry customer.' One Nvidia one Qualcomm one Apple. It's all about trust. It's funny isn't it? Even in the world of silicon and circuits human relationships remain essential. At Intel's Foundry Direct Connect event in San Jose California Tan directly addressed foundry customers discussing the company's specific technologies in power and packaging that put it in position to take on Taiwan Semiconductor Manufacturing Company the largest foundry in the world. Now the road to rebuilding confidence is not paved with good intentions alone. Intel has given the name 18A to its chip technology that it hopes to start producing in volume this year.

Bureaucracy is Heavier than Black Holes

Mr. Tan is also focusing on internal matters cutting bureaucracy and empowering engineers. 'It has been eye opening for me to see how much time and energy is spent on internal administrative work that does not move our business forward,' Tan wrote in a memo to employees in April. He said Intel would have to learn how to do more with fewer people and that employees must be back in the office for at least four days a week by September. Ah bureaucracy! A force more powerful than gravity capable of slowing down even the fastest minds. Mr. Tan is right to tackle this internal drag to streamline the organization and unleash the creative potential within Intel. He's hearing the good the bad the ugly of what's going on so that he can help address those. He aims to turn Intel around and become the master of its domain. 'The definition of insanity is doing the same thing over and over and expecting different results.' With Mr. Tan at the helm perhaps Intel can change its approach adapt to the changing landscape and once again shine as a beacon of innovation.