Lip-Bu Tan appointed chief executive officer of Intel Corporation
Courtesy: Intel
Intel said on Wednesday that it had appointed Lip-Bu Tan as its new CEO, as the chipmaker attempts to recover from a tumultuous four-year run under Pat Gelsinger.
Tan was the CEO of Cadence Design Systems, which makes software used by all the major chip designers, including Intel. Tan was previously on Intel’s board but departed last year, citing other committments.
He replaces interim co-CEOs David Zinsner and MJ Holthaus, who took over in December when former Intel CEO Patrick Gelsinger was ousted. Tan is also joining Intel’s board again.
The appointment closes a chaotic chapter in Intel’s history, as investors pressured the semiconductor company to cut costs and spin off businesses as its sales and business outlook faltered.
Intel shares rose over 13% in extended trading on Wednesday.
Tan becomes the fourth permanent CEO at Intel in seven years. Following Brian Krzanich’s resignation in 2018, after the revelations of an inappropriate relationship with an employee, Bob Swan took the helm in Jan. 2019. He departed two years later after Intel suffered numerous blows from competitors and chip delays. Swan was succeeded by Gelsinger.
Gelsinger took over Intel in 2021 with a bold plan to transform the company’s business to manufacture chips for other companies in addition to its own, becoming a foundry. But Intel’s overall products revenue continued to decline, and investors fretted over the significant capital expenditures needed to become a foundry, including constructing a $20 billion dollar factory complex in Ohio.
Last fall, after a disappointing earnings report, Intel appeared to be for sale, and reportedly drew interest from rival companies including Qualcomm. Analysts assessed the possibility of Intel spinning off its foundry division or selling its products division — including server and PC chips — to a rival.
Intel also doesn’t have a product with significant market share competing with Nvidia’s graphics processors, which have become the chip of choice for developing AI over the past few years.
Intel’s results didn’t immediately get better after Gelsinger was pushed out. In January, Intel issued a weak forecast even as it beat on earnings and revenue. The company pointed to seasonality, economic conditions and competition, and said clients are digesting inventory. The prospect of tariffs was adding to the uncertainty, Zinsner said.
Intel said that Zinsner will return to his previous role of CFO. Holthaus will remain in charge of Intel Products.
Intel was removed from the Dow Jones Industrial Average in November and was replaced by Nvidia, reflecting the dramatic change of fortune in the semiconductor industry.
Intel shares lost 60% of their value last year, while Nvidia’s stock price soared 171%. At Wednesday’s close, Intel’s market cap was $89.5 billion, less than one-thirtieth of Nvidia’s valuation.
