According to informed sources, before officially returning on Tuesday, $Intel (INTC.US)$ the new CEO, Chen Liwu, has begun planning a series of major reforms aimed at completely revitalizing the struggling Technology giant. Measures include significant reforms to chip manufacturing methods and AI strategy. Informed sources revealed that Chen Liwu also plans to address the company's slow operations and the bloated middle management issue through layoffs.

On Monday, the US stock market opened with Intel soaring over 6%, with the stock priced at $25.5, an increase of over 27% for the year.

Restructuring the manufacturing business.

Informed sources indicated that restructuring the company's manufacturing Business is one of Chen Liwu's core priorities. This Business once solely produced chips for Intel but is now repurposed to serve.$NVIDIA (NVDA.US)$Outsource semiconductor production to external customers.

Sources revealed that after being appointed CEO last week, Chen Lifeng told employees in a company-wide meeting that difficult decisions need to be made.

Semiconductor industry expert Dylan Patel stated that a major issue with former CEO Pat Gelsinger, who left Intel in December last year, was that he was 'too good', as he did not want to fire a group of middle managers in the way that was needed.

Chen Liwu was the CEO of chip design software company Cadence and a technology investor, and he had been a member of the Intel Board of Directors until he resigned last August. After a decade of poor decision-making by three CEOs, Chen Liwu will take over this iconic American company. During this decade, Intel failed to make chips for Smart Phones and missed the surge in demand for AI processors, allowing competitors.$Arm Holdings (ARM.US)$and NVIDIA to dominate the market.

Intel reported a loss of 19 billion dollars in 2024, marking its first loss since 1986.

According to informed sources, in the short term, Chen Liwu's goal is to improve Intel's contract manufacturing performance by actively attracting new customers. Intel's wafer foundry provides.$Microsoft (MSFT.US)$and$Amazon (AMZN.US)$Waiting for the company to produce semiconductors.

The company will also restart its AI server chip production plans and is looking at several areas beyond servers, such as Software, Siasun Robot&Automation, and AI foundational models.

An Intel spokesperson said in a statement, "Chen Liwu will spend considerable time listening to the opinions of customers, partners, and employees, and will work closely with our leadership team to prepare for the company's future success."

Intel declined to comment further and also refused to allow Chen Liwu to be interviewed.

At first, Chen Liwu's strategy seemed to be a slight adjustment to Gelsinger's strategy. The core of Gelsinger's transformation plan is to turn Intel into a foundry semiconductor manufacturer, in collaboration with.$Taiwan Semiconductor (TSM.US)$Compete.

Gelsinger had promised to invest hundreds of billions to build factories in the USA and Europe to produce chips for Intel and external customers, but as the market for Intel's core products cooled, he was forced to scale back these plans.

Layoffs, betting on AI.

Insiders revealed that Chen Liwu had proposed some ideas to the Intel Board of Directors last year, but the Board rejected their implementation. It was reported that in August last year, Chen Liwu suddenly resigned due to disagreements with the Board.

According to informed sources, when he returns to Intel this week, he will re-examine Intel's workforce. By the end of last year, Intel's workforce had been reduced by approximately 15,000 people, to nearly 109,000.

Industry analysts and Intel executives state that if Chen Liwang can win at least two major clients for large-scale chip production, Intel's foundry business will succeed.

In order to attract major clients, Intel will improve its chip manufacturing process to facilitate use by potential customers like NVIDIA and Google.

According to reports, Intel has demonstrated improvements in its manufacturing processes in recent weeks, attracting interest from NVIDIA and $Broadcom (AVGO.US)$and both companies have conducted early testing. AMD is also evaluating Intel's processes.

The market expects Chen Liwang to study how to increase output or 'yield' to print more chips on each wafer, with the aim of using the so-called 18A process for mass production of its first internal chip this year.

The company's goal is to release an AI chip once a year like NVIDIA, but it will take several years. Informed sources indicate that Intel may not develop an attractive new architecture for its first AI chip until at least 2027.

Editor/rice