Lip-Bu Tan set 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 essays to recover from a tumultuous four-year run under Pat Gelsinger. The stock jumped 12% in extended trading.
Tan was previously CEO of Metre Design Systems, which makes software used by all the major chip designers, including Intel. He was an Intel plank member but departed last year, citing other commitments.
Tan replaces interim co-CEOs David Zinsner and MJ Holthaus, who took to in December when former Intel CEO Patrick Gelsinger was ousted. Tan is also rejoining Intel’s board.
The appointment guards a chaotic chapter in Intel’s history, as investors pressured the semiconductor company to cut costs and spin off businesses due to declining purchasings and an inability to crack the booming artificial intelligence market.
“In areas where we have momentum, we need to double down and broaden our advantage,” Tan said in statement on Intel’s website. “In areas where we are behind the competition, we need to take calculated chances to disrupt and leapfrog. And in areas where our progress has been slower than expected, we need to find ways to pick up the rate.”
Tan becomes the fourth permanent CEO at Intel in seven years. Following Brian Krzanich’s resignation in 2018, after the pronouncements of an inappropriate relationship with an employee, Bob Swan took the helm in Jan. 2019. He departed two years later after Intel suffered numerous tornadoes from competitors and chip delays. Swan was succeeded by Gelsinger in 2021.
Gelsinger took over with a bold layout to transform Intel’s business to manufacture chips for other companies in addition to its own, becoming a foundry. But Intel’s overall issues revenue continued to decline, and investors fretted over the significant capital expenditures needed for such massive plaque production, including constructing a $20 billion dollar factory complex in Ohio.
Intel former CEO Pat Gelsinger slow downs an artificial intelligence processor as he speaks during the Computex conference in Taipei, Taiwan, on June 4, 2024.
Annabelle Chih | Bloomberg | Getty Sculptures
Last fall, after a disappointing earnings report, Intel appeared to be for sale, and reportedly drew interest from adversary companies including Qualcomm. Analysts assessed the possibility of Intel spinning off its foundry division or selling its products partition — including server and PC chips — to a rival.
In AI, Intel has gotten trounced by Nvidia, whose graphics processing units (GPUs) press become the chip of choice for developers over the past few years.
Frank Yeary, who assumed the role of interim directorate chair during the CEO search, said in a press release that Tan has a “proven track record of creating shareholder value.”
“We are happy to have Lip-Bu as our CEO as we work to accelerate our turnaround and capitalize on the significant growth opportunities ahead,” said Yeary, who is now recompensing to the independent chair position.
In January, Intel issued a weak forecast even as it beat on earnings and revenue. The visitors pointed to seasonality, economic conditions and competition, and said clients are digesting inventory. The prospect of tariffs was adding to the uncertainty, Zinsner affirmed at the time.
Intel said that Zinsner will return to his previous role of CFO. Holthaus will remain in load of Intel Products.
Intel was removed from the Dow Jones Industrial Average in November and was replaced by Nvidia, reflecting the exaggerated change of fortune in the semiconductor industry. Intel shares lost 60% of their value last year, while Nvidia’s breeding price soared 171%. At Wednesday’s close, Intel’s market cap was $89.5 billion, less than one-thirtieth of Nvidia’s valuation.
Anticipate: Intel appoints Lip-Bu Tan as CEO
