Intel Appoints Lip-Bu Tan as New CEO Amid Struggles

The semiconductor company Intel has hired industry veteran Lip-Bu Tan as its new CEO in a bid to revive its fortunes. Tan, who previously served as a board member, will assume the role on Tuesday, stepping in after the abrupt retirement of former CEO Pat Gelsinger.

At 65 years old, Tan brings a wealth of experience to Intel, having been the CEO of Cadence Design Systems, a company that develops software for processor design, for over a decade. He joined Intel’s board in 2022 but left in August before being reappointed alongside his new role as CEO.

The interim Executive Chairman of Intel, Frank Yeary, praised Tan as "an exceptional leader" with a background that combines technology expertise and strong relationships within the industry. His leadership is seen as crucial for Intel, which is navigating a difficult business landscape.

Since Gelsinger's departure in February 2021, Intel has been managed by co-interim CEOs, David Zinsner and Michelle Johnston Holthaus. Gelsinger's time in charge was marked by significant challenges, including a substantial drop in Intel's stock price and a major workforce reduction of approximately 17,500 employees, which constituted about 15% of its staff. These actions were part of efforts to cope with an annual loss of $19 billion and to suspend dividends to conserve cash.

Recently, Intel announced delays in the opening of two new chip factories in Ohio, a decision made to manage finances carefully while working with the $7.8 billion allocated to Intel through the CHIPS Incentives Program established during President Joe Biden's administration.

Intel was once at the forefront of the tech industry, playing a pivotal role in creating the microprocessors that initiated the personal computer revolution. However, with leadership changes, the company lagged in adapting to the mobile computing age prompted by the introduction of the iPhone by Apple in 2007 and has faced stiff competition from agile chip manufacturers. Intel's downturn has intensified with the rise of artificial intelligence, an area where it has struggled to compete against smaller rival Nvidia. Nvidia's market value has surged to $2.8 trillion, dwarfing Intel's current valuation of around $90 billion.

Following the announcement of Tan's hiring, Intel's stock saw a notable increase of over 10% in after-hours trading, reflecting investor optimism regarding Tan’s leadership potential. During his tenure at Cadence Design Systems from 2009 to 2021, he significantly increased the company’s stock value by 44 times.

In recognition of his contributions to the semiconductor industry, Tan received the Semiconductor Industry Association's Robert Noyce Award in 2022, which is named after one of Intel's co-founders.

Intel, CEO, Chipmaker