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intel, the world's oldest semiconductor giant, is losing its former glory.

recently, lip-bu tan, a senior veteran in the semiconductor industry, officially announced his resignation from intel's board of directors.

his resignation application is effective immediately.

the reason for his resignation was differences of opinion with the ceo and senior board members on a number of issues.

more specifically, he was frustrated with the company's bureaucratic, risk-averse culture.

moreover, he favors more targeted layoffs, especially among non-core engineering staff.

as the news came out, the stock price of "toothpaste factory" plummeted by about 6%.

intel is at a critical moment in its history—not only is it facing financial difficulties, but it is also undergoing major organizational changes.

some time ago, it announced a layoff of 15,000 employees with the goal of saving $10 billion in costs by 2025.

this company, once glorious, has suffered one defeat after another.

today, intel’s market value is less than “$100 billion”, far behind tsmc, amd, and samsung, not to mention the “gpu overlord” nvidia.

faced with a major change in leadership, where should intel go?

a regulatory filing with the u.s. securities and exchange commission confirmed the news that lip-bu chen had left intel's board of directors.

after intel made its decision public, he said:

i am grateful for the opportunity to serve on intel's board of directors. i am leaving as i am reprioritizing, and i remain a supporter of intel and its important businesses.

lip-bu tan was formerly the ceo of cadence design, the world's leading eda and ip provider.

he received his bachelor's degree from nanyang university in singapore and his master's degree in nuclear engineering from mit. with his excellent engineering background, he has been active in the business world since he obtained his mba from the university of san francisco.

he is also the founder and chairman of walden international (he founded the company at the age of 28), has invested in many companies, and is known as the "godfather of chip venture capital."

in 2022, intel announced a major plan - idm 2.0, hoping to regain its leading position in the world's semiconductor foundry through hard work and transformation.

as a result, lip-bu chen was hired to join the board of directors.

chen liwu's joining is part of the plan to restore intel's position as the world's leading chip manufacturer.

last october, the board also announced that it would expand his responsibilities to include oversight of manufacturing operations.

serious bureaucracy and redundant staff

reuters reported that chen liwu's sudden resignation was due to his frustration with the company's redundant workforce, chip foundry methods, and risk-averse, bureaucratic culture.

the layoff plan is an important reason for the escalating tension between chen liwu and the board of directors.

as the saying goes, those who share different ideals cannot work together.

chen wants specific layoffs, including mid-level managers who don't contribute to intel's engineering efforts, according to sources.

in 2021, after gelsinger took over as ceo, the company added at least 20,000 employees to achieve its transformation.

chen and some former intel executives agree that the workforce seems too large.

according to two sources, the team sizes for some projects are as much as five times that of similar work at competitors such as amd.

one former executive said intel should have cut twice the 15,000 jobs it announced in august years ago.

chen liwu said, "intel is surrounded by layers of bureaucratic middle managers, which has hindered the progress of intel's server and desktop chip divisions. layoffs should be focused on these people."

shockingly, intel has more employees than nvidia and tsmc combined, which has led to a culture of complacency and lack of competitiveness.

this is exactly far away from the spirit that intel co-founder andy grove values: "only the paranoid survive."

as a big shot in the semiconductor field, he has received praise from many investors.

the reason for his resignation exposed the uncertainty behind the company's efforts to turn losses into profits.

former executives said that chen's departure comes at one of intel's darkest periods in its 50-year history, which could make it a target for activist shareholders.

it is worth mentioning that intel's board of directors has 12 directors.

it is led by chairman frank d. yeary, who has spent his entire career in the financial industry.

among them, two members have backgrounds in electrical and computer engineering and have accumulated certain experience in the semiconductor industry.

1 member who has worked in the pc industry for some time.

the other two, pat gelsinger and stacy smith, are a current and former intel executive.

the rest all come from outside the semiconductor industry.

this illustrates that there are relatively few members with semiconductor and technology backgrounds on the board, which may pose challenges in certain technology decisions.

this was also one of the reasons for chen liwu's resignation this time.

from the perspective of technological leadership, intel has neither reached the level of major chip players such as nvidia nor caught up with amd.

having entered the newer graphics space, it has yet to impress.

to address the arm chip threat from qualcomm and apple, it must completely revamp its flagship laptop chip.

you know, the standby time of the former is much longer than that of intel.

the departure of veteran executives at a time when the company is undergoing major changes will only make intel's situation worse.

moreover, in just two months, the company's market value almost hit rock bottom.

from the end of july to the beginning of august, intel's stock price plummeted by about 30% in just a few days, and its market value evaporated by us$39 billion.

on july 31, the company's market value was $130.86 billion at the close of trading on the new york stock exchange.

then, two days later, intel officially announced a layoff of 15,000 employees. according to intel's goal of "saving $10 billion in costs" by 2025, this 15% layoff was part of the plan.

the letter to all employees said the company would be reorganized to stop "non-essential work" and that all ongoing projects and equipment would be reviewed to avoid excessive costs.

this round of layoffs will begin in the fourth quarter.

after the news of the massive layoffs was announced, intel's market value fell to $121.21 billion.

later, intel released its second quarter financial report for 2024. the report showed that the company's revenue was $12.8 billion, down 1% from the same period last year. net income plummeted 85% to only $83 million.

as a result, the company's valuation further dropped to us$91.86 billion.

gelsinger acknowledged that even though we had achieved key product and process technology milestones, our second quarter financial results were disappointing.

our revenue has not grown as expected, and we have not yet been able to benefit from ai.

however, as mentioned at the beginning, intel's current market value is $94.04 billion, which is slightly higher than before.

death march

since gelsinger took office in 2021, intel has faced past failures and actively promoted a plan called "four years and five nodes" in an attempt to catch up with tsmc.

it is not easy to achieve this goal.

gelsinger called his goal of regaining leadership in 2022 a "death march."

however, the march is getting closer to the end. intel said in april that it still expects to catch up with tsmc by 2026.

by then, tsmc will be shipping 2nm chips. intel said it will start producing the "18a" process equivalent to 2nm in 2025.

but the process has been costly: intel said its wafer fab division had $4.4 billion in primarily internal sales and an operating loss of $2.5 billion.

intel said it has signed contracts worth $15 billion with outside companies.

if intel regains its lead in making the smallest transistors, it will help its own business and improve the performance of its products.

does this 56-year-old semiconductor giant still have a chance to turn around?