Intel CEO Lip-Bu Tan Says Company Lost Data Center Leadership and Is Rebuilding Its Product Strategy
Intel CEO Lip-Bu Tan has offered one of his most direct assessments yet of the company’s position in the semiconductor market, acknowledging that Intel made major mistakes in recent years and lost ground in one of its most important businesses: the data center.
Speaking in a recent interview, Tan said Intel once held a clear leadership position in data center processors, but that advantage weakened over time. His comments come as the company works to regain investor confidence, improve its chip roadmap, and compete more aggressively against AMD in servers, AI infrastructure, and advanced manufacturing.
“We used to have leadership in data center, and over the years we lost it,” Tan said, pointing to past execution issues and internal structural problems that slowed the company down.
Intel’s Data Center Decline Has Been Years in the Making
Intel’s challenges in the server market did not happen overnight. Over the past several years, AMD has steadily gained share in data center CPUs, a segment Intel once dominated with overwhelming control.
By the third quarter of 2025, Intel’s server market share had reportedly fallen to 72%, a multi-year low. Its server revenue share was even lower at 61%. That marks a significant decline from the first quarter of 2019, when Intel held around 91% share in both server unit shipments and revenue.
This shift has changed the competitive balance in the semiconductor industry. AMD’s market value has risen sharply, recently reaching about $689 billion, while Intel’s valuation stood at roughly $563 billion. Intel’s share price has recovered strongly, climbing 182% year-to-date, but the company is still working to prove that its turnaround is sustainable.
Tan’s message is clear: Intel knows where it went wrong, and it is now focused on fixing the core problems that caused it to lose momentum.
Lip-Bu Tan’s Turnaround Plan Focuses on Engineering and Execution
Since taking over as Intel CEO, Tan has emphasized a hands-on approach to product development and engineering. In the interview, he said he brought back former Intel employees to strengthen key product lines and rebuild internal expertise.
One of his most notable changes has been restructuring how engineering teams communicate with leadership. Tan said he wanted engineers reporting more directly to him so he could better understand customer concerns, identify technical problems faster, and correct mistakes before they damage future products.
According to Tan, Intel previously had “too many silos” and “too many people reporting,” which made it harder to move quickly and solve problems efficiently. His goal is to simplify the organization, sharpen product focus, and accelerate the development of stronger, more competitive chips.
“The best thing is to really understand where the problem is,” Tan explained, adding that Intel must focus on engineering, redesign where necessary, simplify products, and deliver “killer products” that customers actually want.
Intel 18A Manufacturing Yields Are Improving
Tan also addressed Intel’s 18A manufacturing process, one of the company’s most important next-generation chip technologies. Intel 18A is central to the company’s ambition to become a stronger advanced chip manufacturer and compete more effectively in the foundry business.
The process has attracted attention because of Intel’s reported agreement with Apple involving chips built using the technology. While Tan admitted that 18A yields were not where they needed to be when he took over, he said the situation is improving.
He noted that a strong manufacturing improvement pace would be around 7% to 8% yield improvement per month, and said Intel is now seeing that level of progress.
That is an important point for Intel’s future. Better yields mean more usable chips per wafer, improved manufacturing efficiency, lower costs, and greater confidence from customers considering Intel as a foundry partner.
CPUs Still Matter in the AI Era, Tan Says
Tan has also pushed back against the idea that CPUs are becoming less important because of the AI boom. During Intel’s recent earnings discussion, he argued that agentic AI could increase the importance of CPUs in future data center infrastructure.
While GPUs and AI accelerators have captured much of the attention during the artificial intelligence buildout, CPUs remain essential for managing workloads, coordinating systems, and running a wide range of enterprise and cloud applications. Tan believes demand for CPUs is already strong and could grow further as AI systems become more complex.
This is a key part of Intel’s strategy. The company wants to reassert itself not only as a CPU leader, but also as a major player in AI infrastructure and advanced semiconductor manufacturing.
Intel Is Trying to Win Back Trust
Tan’s comments show that Intel’s turnaround is not just about launching new chips. It is also about changing how the company operates internally.
The CEO is focusing on fewer layers of management, closer communication with engineers, better customer feedback, and a more disciplined product roadmap. He has openly admitted that Intel lost its edge in the data center market, but he is also presenting a plan to regain it.
The challenge will be execution. Intel must improve its manufacturing performance, deliver competitive server processors, grow its foundry business, and convince major customers that it can meet the demands of the modern AI and cloud computing era.
For now, Tan is positioning Intel as a company that understands its past mistakes and is working aggressively to correct them. Whether that is enough to reclaim leadership in data center chips will depend on how quickly Intel can turn its strategy into market-winning products.
