The Chip Insider®– Lip-Bu Tan’s Intel Strategy

Challenges, Comments, Questions & Answers: Lip-Bu Tan’s Strategy for Intel

Hi Dan, You’ve said Lip-Bu Tan’s strategies are to “Close Intel’s trust gap from its IDM days” and to “Shift the company’s structure from a classic military hierarchical style to a flat Silicon Valley style.” These seem more like tactics than strategy. Can you explain?

The chapter on Strategy & Tactics in the Maxims of Tech book starts with: “Most confuse the two … In military circles the definition is clear … A grand master of strategy, Bob Graham, once told me, “Strategy, in its simplest form, is no more a goal... My dad taught me that grand strategies should come in few words with no more than a sentence (see below for more). Think of Nvidia: Its grand strategy is “AI” … one word…

In that sense, Intel’s grand strategy has slightly changed from Andy Grove’s of ‘lead the PC/CPU revolution.’ Craig Barrett's strategies were … Then came Paul Otellini, who added ... The CPU vector was then split by Brian Krzanich, who added ‘being in foundry’ as a goal, and then Pat Gelsinger’s ‘system foundry,’ which added chiplets to the picture… The issues were never in the strategic goals. The issues were in Intel’s tactical execution of the foundry and GPU strategies, as last covered in The Chip Insider on May 5th…

Put yourself in Lip-Bu’s shoes, is lack of technology a problem when they’re at 18A with backside power? I’d say no. Do they lack an AI strategy? I’d say no because of the focus on open AI … What about trust and execution? They must be the biggest problems Lip-Bu needs to fix. Fixing problems becomes goals. Finding solutions becomes tactics… These are cultural shifts for Intel… Cultural change … can be done by bringing in new management from the outside. This has been done with Li-Bu Tan, Naga Chandrasekaran, and Kevin O'Buckley. Cultural change is also made easier by flattening the organization to a more Silicon Valley style.

One of Intel’s key weaknesses that Lip-Bu is addressing here is DCTs, which is a big reason why Intel has been so slow to be competitive against TSMC… Shorter DCTs mean shorter learning cycles, which turn into faster TTS and TTM (Time To Solution and Time To Market)… This is a key strategy for Lip-Bu. – Dan

Maxims: Strategy versus Grand Strategy – the difference is significant. There are only five business strategies: cost, quality, distribution, technology, and intellectual property (IP).

“Strategy requires a sense of the whole that reveals the significance of respective parts.” – John Lewis Gaddis