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New Intel CEO Lip-Bu Tan is considering a shift in the company’s strategy for its contract manufacturing business to win major customers. According to a July 1 Reuters report, this strategy may be prohibitively expensive.
The shift would likely lead to writing off at least hundreds of millions or even billions of dollars of chip making technology used to develop the so-called “18A” manufacturing process as a loss.
Tan’s plans will see Intel’s foundry business offering a newer generation of chip making processes called the “14A” to new customers, which could compete with Taiwan Semiconductor Manufacturing Company (TSMC), to land larger customers like Apple and Nvidia.
Following news of the announcements, Intel’s shares lost around 4% on July 2, before climbing to 3% on July 3, Investopedia reported. The company’s shares have lost nearly 30% of their value in the past year because of its restructuring plans and speculation around potential deals with TSMC and Broadcom.
Tan became CEO of Intel on March 18, succeeding interim co-CEOs David Zinsner and Michelle (MJ) Johnston Holthaus.
