Intel CEO Lip-Bu Tan admits company is no longer a top 10 chipmaker

[Skye Jacobs]

Big quote: Intel, once the undisputed titan of the semiconductor world, is confronting a sobering new reality under the leadership of its recently appointed chief executive, Lip-Bu Tan. In a candid address to employees this week, Tan acknowledged that the company has slipped far from its former position at the top of the global chip industry.

Tan, who took the helm in March following the departure of Pat Gelsinger, did not mince words about the company's diminished standing. Speaking to staff in a company-wide broadcast that was leaked to The Oregonian, he reflected on Intel's past dominance but stated plainly that those days are over.

"Twenty, 30 years ago, we are really the leader," Tan told employees. "Now I think the world has changed. We are not in the top 10 semiconductor companies." Tan has addressed employees and investors only a few times since his appointment and hasn't spoken to the media at all, so his comments offered a rare glimpse into his unvarnished view of Intel's place in a rapidly evolving industry.

Tan made the remarks amid a major restructuring effort at the company, with thousands of employees worldwide facing layoffs. Intel's market value has plummeted to just over $100 billion, less than half of its value at the end of 2023. This sharp decline stands in stark contrast to the meteoric rise of competitors like Nvidia, whose market capitalization recently soared past $4 trillion.

Tan attributed Intel's struggles to both internal shortcomings and the company's inability to keep pace with rivals in key technological arenas, particularly artificial intelligence. He acknowledged that customers have been dissatisfied with Intel's performance and conceded that the company is too far behind to catch up with Nvidia in developing advanced AI training technology. "On training, I think it's too late for us," the CEO said, adding that Nvidia's dominance in the sector is "too strong" to overcome.

Despite the grim assessment, Tan insisted that Intel's turnaround is possible, though he cautioned it would be a "marathon" rather than a sprint. The layoffs, he explained, are part of a broader effort to make Intel more agile and responsive, similar to its competitors, such as Nvidia, Broadcom, and AMD. Tan called on employees to embrace humility and to focus on listening to customers and adapting to their needs.

While Intel has struggled to gain traction in the booming market for AI accelerators, Tan remains optimistic about the company's prospects in emerging areas such as AI-powered personal computers, where Intel's chips remain competitive. Still, industry analysts warn that the loss of key engineering and leadership talent could hamper Intel's ability to innovate and regain its footing in an increasingly competitive landscape.

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Intel CEO Lip-Bu Tan admits company is no longer a top 10 chipmaker

 

[maxxcool7421]

Gee it is like all that CHIPS money I called a boondoggle was in fact a boondoggle.

what a waste... oh and goooood job replubikans with the tariffs, you cant MaGa the semiconductor industry when your us based intel company will be bankrupt in the next 2 years and only amd (too small to save the US) and CHINA can produce enough cpus/fpgas to keep cars and banks running ... LOL.. _slow_golf_clap LOL ... Hell you cant even get samsung to open the new TEXASS FAB they built because tarrifs killed off all the customer demand hahaha

 

[GodisanAtheist]

Ok so reading between the lines here, is the ARC Graphics card lineup toast?

We all knew the day was coming, but when the CEO says Intel ain't catching up to Nvidia in AI... then what's the point of releasing a dozen large under performing ARC cards?

I suspect Celestial will be the last one we see since it's probably too deep in the dev cycle to really be worth cancelling at this point...

 

[Xelions]

You've slipped Mr. Tan because,

1. You ain't spending enough money to recruit talent
2. Your not creating that atmosphere for that talent to thrive
3. You can't rely on monopolies to work forever eg resellers pushing Intel chips
4. Your not innovating
5. You tried to copy AMD but done it all wrong. The whole ATI saga, but instead with ARC.
6. Oh wait - Donkey Balls - Wrong post!
7. You diverged far too much!

 

[Kirby1]

Gee it is like all that CHIPS money I called a boondoggle was in fact a boondoggle.

what a waste... oh and goooood job replubikans with the tariffs, you cant MaGa the semiconductor industry when your us based intel company will be bankrupt in the next 2 years and only amd (too small to save the US) and CHINA can produce enough cpus/fpgas to keep cars and banks running ... LOL.. _slow_golf_clap LOL ... Hell you cant even get samsung to open the new TEXASS FAB they built because tarrifs killed off all the customer demand hahaha

The tariffs have a bunch of exceptions for chips.

Intel's fall is not the governments fault. It is purely their own. They pissed off their customers for years and once AMD caught up, a lot of people switched just out of spite. They made poor decisions and got lazy and now they are doing poorly. It's not rocket science.

 

[ScottSoapbox]

Wow, not even top 10... that's even worse than I thought.

It's worth noting that Intel's problems mostly stem from strategic decisions made years ago that finally caught up with them.

Those problems were then worsened when their giant bureaucracy caused them to fumble a architecture shrink right as AMD was gathering momentum.

The latter is difficult to avoid, but the former is all on the previous executives. (Long since retired on their bonuses for short-term gains).

 

[godrilla]

I don't recall in AMD's history that they were catching L after L on a constant losing streak like this. Even when cpu business was down ( Bulldozer)Radeon traded blows with GeForce. They need at least one win to end the losing streak. Hopefully B770 is still coming q4 as rumors have it.

 

[Porkous]

Intel may be losing for the same reason AMD is falling behind—it's not about hardware anymore.

Today’s chips are incredibly advanced. They’ve packed in over 10 billion transistors for years now. But without the right software, even a much simpler processor—just 100 million transistors—can compete surprisingly well.

What matters now is the ecosystem. Software is the secret sauce. It’s the oil that keeps things moving, or the perfume that makes hardware irresistible. Nvidia got this right. They didn’t just sell graphics cards—they sold a vision, a platform, a future. That’s why they’re leading, while Intel and AMD are still playing catch-up.

To me a processor is more advanced than a GPU, yet the processor can't be too expensive in comparison to a GPU nowadays.

 

[NumberNine]

Your tax dollars at work.

 

[GeoffreyA]

Ok so reading between the lines here, is the ARC Graphics card lineup toast?

We all knew the day was coming, but when the CEO says Intel ain't catching up to Nvidia in AI... then what's the point of releasing a dozen large under performing ARC cards?

I suspect Celestial will be the last one we see since it's probably too deep in the dev cycle to really be worth cancelling at this point...

As long as Intel makes CPUs, they'll need iGPUs; this has probably saved the Arc division so far. Whether discrete GPUs will remain, who can tell? But they've done well, reaching striking distance of AMD and Nvidia, and it would be a shame to throw away the progress. The Arc division needs something like Zen; but here, they're fighting on two fronts, competitors who are neither bogged down by 14nm-like woes nor putting forth their full power.

GN says that Intel's supply and lead times are some of the weaker links in the chain. Board partners have been selling Battlemage well, more than Alchemist, though dwarfed by the competition.

 

[JohnRambo4]

Ready for your new Chinese desktop CPU? Spyware built-in at the hardware level.

 

[mcnabney]

Intel rode the chip cash-cow right into the ground. They made tons of short-term profits while their fabs became antiquated and the tech they were developing was inferior.

They probably need to decide if they are going to operate as a foundry or as a developer. Trying to do both at once makes them less competitive. Samsung, Micron and TSMC have focused on making chips while Nvidia, AMD (after shedding Globalfoundries), Broadcom, Apple, and ARM (as well as others) are developing unique products for different markets.

 

[brucek]

Ok so reading between the lines here, is the ARC Graphics card lineup toast?

We all knew the day was coming, but when the CEO says Intel ain't catching up to Nvidia in AI... then what's the point of releasing a dozen large under performing ARC cards?

I suspect Celestial will be the last one we see since it's probably too deep in the dev cycle to really be worth cancelling at this point...

I'm probably dreaming here, but the idea of a newly humble and hungry chip maker, possibly with
fab capacity to spare, and a need to continue to making integrated GPUs, might see a business opportunity in making mainstream graphics cards for gamers.

Even better if their view that they already lost AI frees them from having to focus on AI capabilities first; from having motivation to cripple the consumer cards in for example VRAM so they don't cannibalize more expensive enterprise offerings; and from not even really wanting to sell to gamers at all due to making much more profit in another market.

Nvidia's ascendance and focus on AI has not been great for gamers nor gaming-first GPUs. Maybe that's an opening for Intel.