Intel’s New CEO Refuses To ‘Sugarcoat’ The Company’s 2024 Performance, Vows To ‘Align Spending With Market Demand’ – Intel (NASDAQ:INTC)

Intel Corp. INTC is undergoing a significant transition under the leadership of its newly appointed CEO, Lip-Bu Tan, who aims to revamp the company’s operations and leadership.

What Happened: In his inaugural letter to shareholders on Thursday, Tan highlighted his commitment to both Intel’s product business and its contract chip manufacturing unit, a strategy originally championed by former CEO Pat Gelsinger. He also referenced the cost-cutting measures implemented under Gelsinger, which involved a 15% workforce reduction, reported Calcalistech

Tan, a seasoned semiconductor industry professional, has returned to Intel’s board along with his CEO appointment, after resigning last year following disagreements over the company’s turnaround strategy.

Furthermore, the Portland Business Journal quoted Tan saying, “As I look back on the company’s 2024 results, there is no sugarcoating the fact that we fell short of your expectations. There are many reasons for this, but there are no excuses. I am focused on solutions that will enhance the long-term performance of the company and deliver for you, our shareholders.”

“While there are clear challenges that we need to overcome, there are also significant opportunities to accelerate our turnaround and improve our performance,” Tan wrote. He pledged to capitalize on Intel’s gains in AI and “align spending with market demand,” making its foundry business profitable.

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Why It Matters: This leadership transition comes amidst a wave of changes at Intel. Three board members are preparing to step down, signaling a continued shift in strategy under Tan. This shake-up is part of Tan’s broader plan to regain Intel’s former dominance in the semiconductor industry.

Moreover, industry veterans have suggested that Intel should shift its focus. Chiang Shang-Yi, a former executive at Taiwan Semiconductor Manufacturing Company TSMC, suggested that Intel should focus on mature process chips instead of trying to rival the world’s top chip foundry. This advice aligns with Tan’s strategy to “align spending with market demand” and could be a key driving force for Intel in the near term.

Intel holds a momentum rating of 19.92% and a growth rating of 3.11%, according to Benzinga’s Proprietary Edge Rankings. The Benzinga Growth metric evaluates a stock’s historical earnings and revenue expansion across multiple timeframes, prioritizing both long-term trends and recent performance. For an in-depth report on more stocks and insights into growth opportunities, sign up for Benzinga Edge.

Intel stock dropped 3.85% to close at $22.71 on Friday. The stock climbed 12.3% year-to-date.

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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.