Track Hyper | Intel's Chen Liwu Debut: Revival and Reconstruction

Author: Zhou Yuan / Wall Street Insight

On April 1st, Beijing time, at the Virgin Hotels Las Vegas in Las Vegas, USA, 65-year-old Lip-Bu Tan stood in the spotlight at the Intel Vision conference.

The newly appointed CEO of the global chip giant Intel, who has just been in office for 14 days, is attempting to reverse the fate of this "old-school" technology company with an almost "youthful" approach, hoping to sweep away Intel's "old-fashioned" image and rejuvenate its vitality.

In this speech, regarded by the industry as Intel's "life-and-death moment," Lip-Bu Tan put forward a strategic declaration centered on "engineer culture"; at the same time, he disclosed a series of radical reform measures, including divesting non-core businesses, accelerating AI chip deployment, and advancing the mass production of the 18A process.

Strategic Scalpel: Focus on Core

Lip-Bu Tan candidly stated, "We have fallen behind in innovation speed and customer response."

This statement directly points to Intel's core dilemma in recent years—being far outpaced by Nvidia in the AI chip sector, surpassed by TSMC and Samsung in process technology, and experiencing a continuous decline in market share.

In the AI chip field, Intel is facing absolute pressure from Nvidia, while also being strongly challenged by AMD.

According to market statistics from organizations such as Futurum Intelligence, TrendForce, and Gartner, Nvidia's market share in the data center AI chip market is about 89%-92% in 2024; in the overall AI chip market (including edge and endpoint devices), its share is about 58%-65%.

AMD Instinct accelerator revenue has surpassed $5 billion, while Intel's Gaudi series AI accelerators failed to achieve the $500 million revenue target, and the 2024 target has not been met.

To break the deadlock, Lip-Bu Tan introduced the strategic scalpel of "focusing on core business."

In his speech, Lip-Bu Tan clearly stated, "We will divest assets unrelated to the company's mission and develop customized semiconductor products."

Although Lip-Bu Tan did not disclose specific divestment directions, the industry generally speculates that non-core businesses may involve edge areas such as the Internet of Things and wearable devices.

This decision is consistent with Intel's $10 billion cost-saving plan launched in 2024, including the previously announced 15% workforce reduction, aimed at reshaping competitiveness through resource centralization.

Institutional bloat has been a shortcoming in Intel's corporate governance, leading to a series of derivative issues.

A former Intel engineer told Wall Street Insight, "Intel has overlapping architectures, slow decision-making, very slow responses, poor departmental collaboration, an arrogant attitude towards customers, and a company culture that can be described as 'decayed,' which has led to many projects and technologies failing to execute, resulting in either product delays or project abandonments."

Commenting on Lip-Bu Tan's speech, this former Intel engineer said, "The direction is correct, but it is unclear how deep the execution will be. Lip-Bu Tan has the support of the board, which may make difficulties a bit smaller. One thing is certain: if Lip-Bu Tan does not continue to cut jobs, the possibility of Intel's 'rebirth' is very small." Chen Liwu admitted, "We have been too slow to adapt and meet customer needs."

In the face of the AI wave, Chen Liwu has identified the data center business as a core breakthrough point. He stated, "We must develop competitive rack-level system solutions to strengthen our position in the cloud AI market."

This statement has been interpreted as a benchmark against NVIDIA's GB200 NVL72 system—this system integrates 72 GPUs within a single rack, with a computing density far exceeding Intel's existing solutions.

Disruption and Bundling: Chen Liwu's Speed

Chen Liwu revealed that Intel's engineering team has initiated a reconstruction of the AI chip architecture, planning to adopt a "software-first" design philosophy to disrupt Intel's traditional "hardware-first" model.

To address complex challenges and support customer workloads, Intel will adopt a software-first design mindset and leverage AI-driven system design to accelerate the development process of new computing architectures.

This represents the most significant change in Chen Liwu's approach to Intel's original technology and product strategy and is part of the four core plans that are about to be advanced by Intel; the other three plans are: wafer foundry, strengthening product structure, and customizing x86 architecture chips.

Chen Liwu believes that the foundation for promoting these four plans lies in strategic transformation (such as divesting non-core businesses and strengthening foundry services), establishing a technology roadmap (such as the 18A process node and AI PC ecosystem), enhancing customer collaboration (such as integration with IBM's watsonx platform), and fostering an innovative culture—"Under my leadership, we will return Intel to an engineering-first company and operate like a startup again."

This statement actually indicates that Chen Liwu has already recognized a series of issues within the Intel team, such as poor collaboration, slow response, low efficiency, and too many idle personnel.

These actions and plans were completed within 14 days of Chen Liwu's appointment, which is quite efficient.

Why so fast?

Robin Furlong, CEO of Farient Advisors, a top global compensation consulting firm, believes that Chen Liwu's task is not just to turn losses into profits but to almost complete Intel's "reconstruction."

Robin Furlong led the design of Chen Liwu's compensation plan for 2025, which was described by Fortune magazine as "the most aggressive performance-linked case in the semiconductor industry."

In the SEC filing submitted by Intel on March 14, it was explicitly required that Chen Liwu, "as one of the conditions of his appointment, must personally purchase $25 million worth of Intel stock within 30 days of taking office."

Chen Liwu achieved this requirement in his first month in office.

Although this was a requirement from Intel's board, Chen Liwu's symbolic action was seen by the market as a firm bet on his AI strategy.

However, this is actually part of the core of Robin Furlong's determination of Chen Liwu's compensation plan for this year, with another requirement: to hold for at least five years; if he cashes out early or fails to meet performance targets, his equity incentives will partially or fully expire.

In this plan, there is another "offer": 75% of Chen Liwu's compensation structure this year consists of equity rewards, including $17 million in performance shares and $25 million in stock options, but multiple conditions such as market value growth and process technology breakthroughs must be met This plan emulates the private equity "hands-on" model, deeply binding the CEO's interests with those of the shareholders. Farient's design logic is "compensation equals strategy," reshaping the market's confidence in Intel's transformation through high-risk incentives.

With such stringent requirements, Chen Liwu's agreement is understandable, which explains his swift actions.

Manufacturing Renaissance and Cultural Identity

As the only IDM company in the United States with both chip design and manufacturing capabilities, Intel's process technology is seen as the key to a turnaround.

Chen Liwu emphasized in his speech, "In the coming years, we aim to become the best wafer foundry."

Currently, Intel's 18A process technology (equivalent to 1.8nm) is progressing as planned, with the first external customer tape-out about to be completed. The Panther Lake processor using this technology is expected to enter mass production in the second half of 2025.

Earlier reports indicated a delay for Panther Lake, but Intel clarified to Wall Street that this chip will still enter mass production as scheduled.

Timely mass production is crucial for Intel.

If the 18A process enters mass production on schedule, it will narrow the gap with TSMC's 3nm and Samsung's 2nm, laying the foundation for the subsequent Nova Lake processor (to be released in 2026).

Chen Liwu specifically mentioned that he would collaborate with the U.S. government to strengthen American semiconductor manufacturing leadership, echoing the policy direction of the U.S. CHIPS and Science Act.

A leading technology engineering company, the true driving force is actually cultural identity; the foundation of technological renaissance lies in talent and culture.

Chen Liwu's prescription for Intel's previous bureaucratic decision-making system is to re-emphasize "startup spirit": we need to operate like a startup again.

So, what kind of culture will Intel adopt under Chen Liwu's leadership?

The answer is—engineer culture.

Chen Liwu stated, "We will make Intel return to being an engineering-first company," thus prioritizing the recruitment and retention of top talent to reverse the talent loss in recent years.

To stimulate innovative vitality, Chen Liwu proposed a "first day of a startup" culture, advocating for simplified processes and reduced bureaucracy.

He cited his own experience: during his early years as CEO at Cadence, he achieved a doubling of revenue and a 3200% surge in stock price through cultural transformation.

This experience may become a benchmark template for Intel's transformation.

Despite Chen Liwu's ambitious strategic blueprint, Intel still faces multiple challenges.

First is the pressure of technological catch-up; the mass production timeline of the 18A process lags behind competitors, and the AI chip architecture has yet to prove its market competitiveness.

Second, there are cash flow and debt pressures; third, a crisis of customer trust; and finally, geopolitical risks, as the global semiconductor supply chain restructuring may impact Intel's manufacturing layout and market expansion.

These predicaments have led to Intel being "abandoned" by the secondary market: by the end of 2024, Intel's annual stock price plummeted nearly 60%, being removed from the Dow Jones index and replaced by NVIDIA, with its market value also falling below $100 billion.

At the end of his speech, Chen Liwu quoted Thoreau: "Rather than love, money, and fame, give me truth." This "chip venture capital guru" is trying to lead Intel through the fog with the pragmatic spirit of an engineer.

In the next three years, whether the IF department can successfully break through, whether AI chips can seize opportunities, and whether cultural transformation can take root will become the touchstone for testing its strategy.

For the capital market, Intel's valuation reconstruction may begin with this Chinese CEO's "moment of truth."