Key Shifts at Intel as Investors Await Results Under New CEO Lip-Bu Tan
All eyes are on Intel as the company prepares to release its quarterly earnings this Thursday—results that could provide the first meaningful insight into CEO Lip-Bu Tan’s approach to restoring stability and competitiveness to the iconic chipmaker.
Once a dominant force in global semiconductors, Intel has struggled with declining performance, falling behind rivals such as AMD in personal computing and data center markets, and losing significant ground to Nvidia in the booming artificial intelligence sector.
Investors are eager to see whether Tan, who officially took the helm in March following a departure from Intel’s board last year over strategic disagreements, can halt the slide and set a clearer course forward.
The company is on track to record its fourth consecutive revenue decline, adding to the urgency for a fresh and credible vision.
“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,” said Hendi Susanto, portfolio manager at Gabelli Funds, which holds Intel stock.
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Strategic Overhaul Amid Fierce Competition and Geopolitical Tension
Tan has already begun implementing significant changes, starting with a restructured leadership model that brings major chip divisions under his direct oversight.
This move, aimed at reducing bureaucracy and accelerating decision-making, reflects his broader strategy to streamline operations and redirect capital toward high-cost chip manufacturing initiatives.
But challenges remain—especially in the realm of AI. Intel has sidelined its Falcon Shores graphics chips, limiting its presence in a fast-growing sector. To regain ground, Tan recently appointed Sachin Katti, the former head of networking, as the company’s new chief technology officer and AI lead.
Beyond internal restructuring, Intel faces increasing pressure from international trade dynamics. The intensifying U.S.-China trade dispute has raised concerns of reciprocal tariffs, with the China Semiconductor Industry Association recently signaling potential duties of 85% or more on U.S.-made chips.
Though semiconductors have not yet been targeted by current U.S. tariffs, former President Donald Trump has hinted at new levies specifically targeting the industry. This poses a risk to Intel, as nearly a third of its 2024 revenue came from the Chinese market.
Despite this, analysts believe Intel could see short-term gains from accelerated PC shipments ahead of potential tariffs.
Canalys reports global PC sales rose 9.4% during the quarter.
Additionally, Intel may find relief by shifting production to facilities outside the U.S., such as its plant in Ireland, while still relying on TSMC for some of its advanced chips—an arrangement that could help soften the blow of future Chinese tariffs.
Financially, Intel’s outlook remains shaky. The PC division is expected to post an 11% year-over-year revenue decline to $6.73 billion, and the data center unit is projected to report its twelfth straight drop.
Overall, analysts anticipate a 3.4% dip in total revenue, with net losses widening to nearly $945 million—more than double the $381 million loss from the same period last year.
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