Intel names seasoned chipmaker Lip-Bu Tan as CEO, indicating that the company will not separate its chip design and manufacturing divisions.
Three months after Intel fired Pat Gelsinger, the company's veteran CEO, Lip-Bu Tan was appointed.
Ankush Pandey
Highlights
- Intel names Lip-Bu Tan, a veteran of the chip industry and former board member, as its CEO.
- The date of Tan's appointment is March 18.
- Intel fired Pat Gelsinger as CEO in December 2024 due to the company's subpar performance.
Lip-Bu Tan, a veteran of the chip industry and a former board member, was named CEO of Intel on Wednesday. The company hinted that it was unlikely to separate its manufacturing and chip design operations. Three months after Intel fired Pat Gelsinger, its CEO and a seasoned businessman, for his ambitious and expensive plan to turn the company around that was failing and undermining investor confidence, the appointment took effect on March 18.
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Tan, a former board member of Intel, had been considered for the CEO position because of his extensive knowledge of the chip industry and his track record of investing in tech companies that showed promise. As reported by Reuters, the board of Intel approached him in December to see if he was interested in accepting the position. In a letter to Intel staff on Wednesday, Tan stated, "Together, we will work hard to restore Intel's position as a world-class products company, establish ourselves as a world-class foundry, and delight our customers like never before."
In Wednesday's extended trading, Intel's stock jumped 12%, a move that analysts hailed as likely to provide some stability for the chipmaker. In 2024, the company's stock fell sixty percent. Intel is going through a historic transition as it works to get out of one of its darkest times.
Some investors are worried about the strain on the company's cash flows because it is investing a lot of money to become a contract manufacturer of chips for other companies. it struggles to capitalise on the surge in investment in cutting-edge AI chips that has boosted the fortunes of market leader Nvidia and other chipmakers.
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TSMC has independently investigated controlling some or all of Intel's chip plants, possibly as part of an investor consortium or other structure, while media reports over the past two months have stated that rival chip companies, such as Broadcom, are assessing Intel's chip design and marketing business.
Reuters said Tuesday that after US President Donald Trump's administration asked TSMC to help revive the struggling chipmaker, TSMC had reached out to some of Intel's largest potential manufacturing clients about establishing a joint venture to run Intel's factories.
"This (Tan's appointment) is welcome news," according to Jack E. Gold, president and analyst of J Gold Associates, a company that covers the chip industry.
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Tan has a "intrinsic understanding of the semiconductor industry, both from a product design aspect as well as the needs of enabling chip manufacturing - an area that Intel Foundry needs help in making their tools more user-friendly and accessible for potential customers," said Tan. According to Gold and other analysts, Tan's messaging seemed to indicate that he wanted to keep the company intact, but they also stated that any changes to the chipmaker would take years and that investors would need to exercise patience.
Long Admired
"Intel is a company I have long admired," Tan wrote in his letter on Wednesday, indicating his belief that the company can be reversed. Tan, a 65-year-old executive with degrees in business administration, nuclear engineering, and physics, was born in Malaysia and raised in Singapore. From 2009 to 2021, he was the chief executive officer of Cadence Design Systems, a chip-design software and Intel supplier. The company's stock and revenue soared during his tenure.
Last year, Tan resigned from the board of Intel due to disagreements about how to turn the company around. According to Reuters, he became irritated with Intel's large workforce, contract manufacturing strategy, and risk-averse, bureaucratic culture.
Intel announced that Tan will return to the board.
Tan "brings stability and experience to a role that needs someone of his calibre, which is why I believe the company will likely stay the course with his appointment and continue to develop foundry and product," stated main analyst Anshel Sag of Moor Insights & Strategy.
Tan's appointment follows weeks of turmoil in international markets as Trump threatens to impose import tariffs in an effort to increase domestic manufacturing.
Trump has claimed that Asian nations, including Taiwan, have surpassed the United States in chip manufacturing, despite the fact that he has not publicly commented on Intel.
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