Intel’s Co-CEOs Outline Company’s Future Plans: Business Split, 18A Developments & AI Market Strategies

Intel’s interim co-CEOs, Michelle Johnston Holthaus and David Zinsner, have shared comprehensive insights into the company’s strategic vision and direction for the future.

Intel’s Strategic Shift: Insights from Interim Co-CEOs

In light of the departure of former CEO Pat Gelsinger, there has been increasing curiosity surrounding the trajectory of Intel’s operations. During a recent appearance at the Barclays Technology Conference held in San Francisco, Holthaus and Zinsner articulated several key developments pertaining to Intel’s future, particularly regarding the Intel Foundry and the data center business.

A notable announcement involved significant restructuring within Intel Foundry. The company is instituting a separate operational board aimed at creating a distinct identity for its Internal Foundry Services (IFS). This strategic move underlines a commitment to evolving IFS into a more focused and competitive entity, which has been previously covered in detail in a separate analysis.

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In a highly anticipated update, Holthaus introduced the advancements related to Intel’s upcoming 18A manufacturing process. The co-CEO confirmed that the next-generation Panther Lake System on Chips (SoCs), which will succeed Arrow Lake, is set to leverage this advanced process technology. Initial engineering samples (designated as “ES0”) have already been distributed to a select group of partners, indicating progress in the validation phase and dispelling doubts surrounding the efficacy of the 18A process.

Now we are using Intel Foundry for Panther Lake, which is our 2025 product, which will land on 18A. And this is the first time that we’re customer zero in a long time on an Intel process.

But just to give some assurances, on Panther Lake, we have our ES0 samples out with customers. We have eight customers that have powered on, which gives you just kind of an idea that the health of the silicon is good and the health of the Foundry is good.

– Intel’s Michelle Johnston Holthaus

Another critical area addressed was the company’s outsourcing strategy. Holthaus asserted that while leveraging external foundries such as TSMC has historically yielded advantageous results, Intel remains optimistic about the performance of its own Foundry services. This dual approach, dubbed the “hybrid sourcing”model, allows for optimized average selling prices (ASPs) while ensuring timely order fulfillment.

And what I found was at times, picking TSMC was the right decision, because where I could land on their performance price curve made the most sense for the ASP that I could get at the time.

But I’ll also say, TSMC has been a fantastic partner. They’re very easy to work with and myself being very customer-oriented, what I tell everybody at Intel every day is they’re the benchmark for what’s expected in the industry.

– Intel’s Michelle Johnston Holthaus

Concerning Intel’s AI business prospects, Holthaus acknowledged challenges with the Gaudi product line’s deployment, citing quicker adoption rates for AMD solutions in this sector. Nonetheless, she expressed confidence in Intel’s ability to recapture market share with upcoming products. The launch of Falcon Shores is anticipated to enhance the scalability and deployment ease of Intel’s offerings within the next year, thereby stabilizing data center performance.

Throughout the discussion, the interim co-CEOs highlighted numerous other factors, including trends in AI PC sales and the overall market landscape. Despite facing obstacles, Intel remains resolute about its strategic direction and appears to have a plan to navigate its future effectively.

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