Intel is signaling a shift in its production strategy, moving away from its traditional “no wafer left behind” approach to prioritize efficiency and a more sustainable, zero-waste model, Business Insider reports.
The company’s executives emphasized the need to be more mindful of capital expenditures and operational costs, particularly as Intel seeks to rebound from a series of challenges in the highly competitive semiconductor market.
Speaking at the UBS Global Technology and AI Conference, Naga Chandrasekaran, Intel’s Chief Global Operations Officer, explained that the company must now embrace a “no capital left behind” mindset. This marks a departure from Intel’s past strategy, where it produced excess wafers in anticipation of future demand—an approach that worked when Intel held a dominant position in the market. However, with increasing competition from AI leader Nvidia, Samsung, and other global players, this strategy has become unsustainable, executives say.
Intel, which was once the powerhouse of Silicon Valley’s chipmaking industry, has faced significant challenges in recent years. The company has struggled to keep up with the rising demand for artificial intelligence (AI) chips, with companies like Microsoft and Google designing their own chips, further eroding Intel’s market share. As a result, Intel’s stock price has dropped nearly 50% this year, and the company has endured billions in losses, along with sweeping layoffs and buyouts.
Chandrasekaran, who joined Intel in 2023 after two decades at Micron, noted that the shift to a more disciplined approach was essential as the company works to regain its competitive edge. Intel’s interim co-CEO David Zinsner echoed this sentiment, stating that the company was scrutinizing every dollar spent on capital and operating expenses.
“We’re going line by line through this stuff,” Zinsner said.
He emphasized that efficiency is now at the forefront of Intel’s strategy.
Despite these challenges, Intel has also received significant support from the US government. The company is set to receive a $7.9 billion grant under the CHIPS Act, designed to bolster the American semiconductor industry. However, this grant is less than the $8.5 billion initially promised due to a separate $3 billion allocation for military chip production. Intel executives downplayed concerns over the impact of political factors, such as potential tariffs under the incoming Trump administration, noting the company’s global manufacturing footprint.
The shift toward greater efficiency comes at a time when Intel is navigating a period of leadership transition. CEO Pat Gelsinger’s sudden departure earlier this week, following disagreements with the board over turnaround plans, has added uncertainty to the company’s future. Reports suggest that Intel is considering candidates such as Lip-Bu Tan, a former board member, and Matt Murphy, the CEO of Marvell Technology, to fill the leadership void.
