Intel’s stock has tripled under Lip-Bu Tan, who has won over Trump, partnered with Musk, and attracted Apple’s interest. The question is whether the relationships will produce the manufacturing execution that Intel has failed to deliver for a decade.TL;DR
Intel’s stock has tripled in twelve months. Its chief executive still has not told most of his employees what the plan is.
Lip-Bu Tan, who became CEO in March 2025, has spent the first fourteen months of his tenure building relationships outside the company rather than restructuring the one inside it. He has won over Donald Trump, struck a partnership with Elon Musk, attracted interest from Apple, and turned the United States government into Intel’s third-largest shareholder. The stock hit a record in April, surging 24 per cent in a single day, its best performance since 1987. In April alone, shares rose 114 per cent, the best month in Intel’s 55 years on the Nasdaq.
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The question is whether the relationships will produce the manufacturing execution that Intel has failed to deliver for a decade. More than a dozen current and former employees told Bloomberg that Tan has not widely explained his specific plan to fix products and manufacturing. The fundamental problems remain: Intel needs products that can win back lost market share, and manufacturing that is good enough to convince rivals to pay billions for access to it. Neither is guaranteed.
The US government invested 8.9 billion dollars in Intel in August 2025, acquiring a 9.9 per cent stake at 20.47 dollars per share that is now worth approximately 36 billion dollars. The deal, which combined CHIPS Act grants with a secure chip programme investment, made the federal government a major Intel shareholder. It followed a White House meeting in which Tan turned a public confrontation with Trump into an agreement, reportedly calling on Michael Dell and other industry figures to vouch for him.
The Terafab partnership with Musk’s SpaceX, xAI, and Tesla is a scheme to build a massive chip factory complex in Texas with an initial investment of 55 billion dollars and a total cost that could reach 119 billion. The deal was the result of Tan chatting with Musk personally over time, and took most of Intel’s other leaders by surprise. Tesla plans to use Intel’s next-generation 14A manufacturing process, and xAI’s AI5 chip is among the first products targeted for the facility.
Apple has held exploratory discussions with Intel and Samsung about producing its main device chips in the United States, a development that would be transformational for Intel’s foundry business if it progresses beyond the early-stage talks reported this week. Apple currently manufactures virtually all of its processors at TSMC in Taiwan. Any diversification would represent the most significant validation of Intel’s manufacturing ambitions since Tan took the job.
In his first interview as CEO, Tan acknowledged the external focus. “Intel has the technology, talent and scale to lead again, but leadership is earned through execution,” he said. He is targeting the end of June to complete a recruitment drive for the internal leadership team he says he can trust to deliver.
The execution challenge is quantifiable. According to New Street Research, Intel’s cost per chip is approximately three times that of TSMC, the industry leader. The largest component of that gap, more than 40 per cent, is tied to yield, the proportion of usable chips produced per manufacturing run. Intel’s yield rate is approximately 65 per cent. TSMC’s exceeds 80 per cent. Only 8 per cent of the cost difference is attributable to higher US labour costs.
Intel’s 18A manufacturing process, the technology on which the company’s foundry future depends, is improving but not yet competitive. Intel is building its Computex 2026 lineup around 18A, including Panther Lake mobile chips and 288-core Clearwater Forest server processors, but yields are expected to reach industry-standard levels only in 2027. The company missed demand in its most recent quarter partly because it had not allocated enough production capacity for resurgent data centre chip orders.
Naga Chandrasekaran, who has led Intel’s factory business for nearly two years after joining from Micron, said one of his first goals is winning back Intel’s own product teams, which currently outsource some of their most important chips to TSMC. But even recapturing internal demand will not be sufficient. “Intel products alone, even in a wildly successful scenario, cannot fund the capital and filling the fabs and the scale that’s needed to be successful enough in a silicon business today,” he said.
The candour is unusual for a company that spent years under previous leadership presenting its decline in optimistic terms. Under Pat Gelsinger, who preceded Tan, three years of losses and a 33 per cent revenue decline from the 2021 peak were not characterised as dire, according to Chandrasekaran.
Kevork Kechichian, whom Tan brought in to run Intel’s server chip unit after a career at Qualcomm and Arm, described an internal culture that has normalised schedule slippage. When teams fell behind on deadlines by a couple of weeks, he asked for a recovery plan. They responded by adjusting the schedule to accommodate the delay. “I said, ‘What’s the recovery?’ and they came back with, the recovery is they adjusted the schedule to go another two weeks,” he said.
Getting at least 80 per cent of the organisation to believe in the need for urgency is one of the management team’s priorities. The challenge is structural as much as cultural. Intel was built to lead the semiconductor industry with a near-monopoly in data centre processors. It held 99 per cent of that market. The skills required to compete from behind, to win orders on price, yield, and delivery against a dominant incumbent, are different from those required to set the industry’s agenda.
Tan’s management style, described by those who know him, mirrors his venture capital background. He hires based on high-level industry conversations rather than detailed business plans, backs the people he trusts, and devotes his energy to opening doors rather than scrutinising strategies. In venture capital, the approach works because the cost of failure on any individual bet is contained. In semiconductor manufacturing, where factories cost tens of billions of dollars and a single process generation that fails to achieve target yields can consume years of investment, the tolerance for imprecision is lower.
Intel’s first-quarter 2026 results beat Wall Street expectations by more than a billion dollars, with revenue of 13.6 billion dollars against a consensus estimate of 12.3 billion. Data centre and AI revenue grew 22 per cent year over year. The stock surge that followed reflected not just the earnings beat but a broader reassessment of Intel’s position in the AI ecosystem, driven in part by Nvidia CEO Jensen Huang’s public statements that CPUs will play a major role in AI data centres alongside GPUs.
The optimism is real but conditional. Investors who bid up the stock are pricing in a future in which Intel’s manufacturing becomes competitive, Apple and other customers place orders, the Terafab project delivers on its ambitions, and the 18A process achieves the yields necessary to make the foundry business economically viable. Each of those outcomes is possible. None is certain.
Tan said he has plans for where he wants Intel to be in two years, five years, and ten years. “Credibility comes from results,” he said. The results so far are a stock chart that reflects relationships and a factory floor that reflects reality. The gap between the two is where the next twelve months of Lip-Bu Tan’s tenure will be decided. As Jon Bathgate, a fund manager at NZS Capital, put it: “As much as I believe in Lip-Bu, I think he was dealt such a difficult hand. I think he’s got as good a shot as anyone has of making it work.”
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