In Depth: Intel’s China Partners Expect New Chief to Usher in Growth

Intel is currently undergoing a significant transformation under its new CEO, Lip-Bu Tan, with hopes from its Chinese partners that his leadership will revitalize the once-dominant chipmaker. Despite longstanding dominance in the PC and server sectors, Intel failed to capitalize on the mobile device boom over the past decade. Now, as artificial intelligence (AI) becomes the focal point in technology, Intel’s core CPU business is threatened by Nvidia’s GPUs, AMD’s chips, and Arm-based processors, leading to shrinking market share and heightened competition. [para. 1][para. 2]

Lip-Bu Tan, who took over in March, is a seasoned technology executive and investor, known for co-founding Walden International and sitting on the board of China’s Semiconductor Manufacturing International Corp. (SMIC). Tan’s international and investment background, especially his involvement in China’s chip industry, has raised hopes he can navigate Intel through its current slump. He signaled his intent to remake Intel to better serve customers and shareholders upon his appointment. [para. 3][para. 4][para. 5]

Financially, Intel has struggled. In 2023, its revenue dipped 2% to $53.1 billion, while profits plummeted from $1.7 billion to a staggering $18.8 billion loss. During the same period, competitors Nvidia and TSMC soared ahead. [para. 6]

According to Chinese investment firm WI Capital, Intel’s manufacturing lag—falling behind TSMC and Samsung—remains the core issue. Despite this, Intel holds strategic importance as the largest American wafer foundry, making it vital for U.S. ambitions to lead in AI. Intel intends to invest over $100 billion in U.S. manufacturing in the next five years and has benefited from $7.86 billion in subsidies under the CHIPS and Science Act. In China, Intel is also broadening its focus to the automotive and embodied AI sectors. [para. 7][para. 8][para. 9]

China is pivotal to Intel’s global operations, accounting for about 30% of total revenue. Recent corporate reorganizations and significant layoffs—aligning with Intel’s global target to reduce headcount by 15%—have created uncertainty among Chinese partners, who are counting on Tan to stabilize the company. Tan emphasized listening to customer feedback in his early days as CEO, meeting over 200 customers, and received strong support from Chinese partners, particularly in cloud computing. [para. 10][para. 11][para. 12][para. 13][para. 14]

A concrete China-specific strategy has not yet been outlined, with clarity expected after an imminent new round of layoffs. Notably, Intel’s global head of automotive is based in Beijing, reflecting the strategic weight the company places on China, particularly as Chinese tech giants like Alibaba Cloud continue to rely on Intel products. Intel is also making inroads into the AI PC, automotive, and embodied intelligence segments in China. [para. 15][para. 16]

Focusing on local expansion, Intel announced in October a $300 million investment to expand its Chengdu packaging and testing plant and boost local supply chain support. Since 2003, the site has seen $4 billion in investment and nearly 3 billion chips shipped. The Chengdu plant remains central to Intel’s packaging and testing operations. [para. 17][para. 18]

In the automotive field, Intel is actively forming partnerships with leading Chinese chip makers like Black Sesame Technologies and ModelBest to position itself in the rapidly growing smart and electric vehicle market. The automotive team was reportedly not affected by recent layoffs. [para. 19][para. 20][para. 21][para. 22]

Intel also aims to address growth opportunities in embodied AI, with ongoing R&D in both its U.S. headquarters and Chinese institutes for robots and factory automation. Many Chinese robotics firms continue to use Intel chips, reflecting Intel’s maintained relevance and outreach in China’s tech ecosystem. [para. 23][para. 24][para. 25][para. 26]