Intel’s New CEO Lip-Bu Tan Reportedly Plans Manufacturing Overhaul, Stock Rips: Retail Stays Divided

Shares of Intel Corp. (INTC) surged by nearly 7% in Monday’s regular trade and extended gains by almost 1% during after-market hours after the company’s new CEO, Lip-Bu Tan, reportedly planned an overhaul in the company’s manufacturing and artificial intelligence (AI) strategies.

According to a report by Reuters, Tan, who is set to take charge on Tuesday, is expected to announce a shakeup of what he thinks has become a slow-moving company.

This includes staff cuts to make the bloated middle-management a lot leaner. Tan is also considering a major revamp to Intel’s manufacturing operations, the report says, citing unnamed sources.

Intel, which used to make chips exclusively for its own usage at one point, diversified its operations to make chips for other companies as well, taking on Taiwan Semiconductor Manufacturing Co. Ltd. (TSMC), among others.

However, its struggles with manufacturing processes and inability to overcome defects led former CEO Pat Gelsinger to gamble on the 18A fabrication process. He famously said once that he’d “bet the whole company on 18A” – a gamble that did not pay off and led to his ouster in December.

Media reports suggest that TSMC is in talks with Nvidia Corp. (NVDA), Advanced Micro Devices Inc. (AMD), and Broadcom Inc. (AVGO) to take over Intel’s foundry business.

While Intel’s stock continued to surge, retail sentiment on Stocktwits showed caution among investors, hovering in the ‘neutral’ (52/100) territory.

One user expressed their bullish outlook on the stock, saying that they are “not selling” the stock.

Another user thinks that Intel is currently available at a bargain price, speculating that an agreement with TSMC, Nvidia, or “a surprise Google or Apple” deal might be on the cards.

However, not everyone is sold on the positive outlook – one user quipped that they’ve “seen this movie” before, referring to the recent surge in Intel’s stock following Tan’s appointment and TSMC foundry rumors.

Intel’s stock has gained over 28% year-to-date but has lost nearly 40% of its value over the past year.

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