Intel names Lip-Bu Tan as CEO to lead turnaround

Intel Corp. has named former board member and semiconductor veteran Lip-Bu Tan as its new chief executive officer (CEO) to script a turnaround in the company’s fortunes.

Tan, who had stepped down from the board last August, will rejoin it, effective 18 March, the company said in a statement.

Intel, which led the semiconductor industry for decades, is seeing an erosion in market share, which is fast dragging down revenues amid a climbing debt burden that forced it to let go of about 15,000 employees.

Sixty-five-year-old Tan, who earlier led Cadence Design Systems Inc. for 19 years, has a tough job ahead.

The new CEO this week said in a memo to Intel staff that he’s confident of turning the business around.

“That’s not to say it will be easy. It won’t be,” he said. “But I am joining because I believe with every fiber of my being that we have what it takes to win. Intel plays an essential role in the technology ecosystem, both in the US and around the world.”

Shares of Intel, which had plunged about 54% in the past one year, rose 10% following the announcement of the new CEO.

Tan succeeds interim co-CEOs David Zinsner and Michelle Johnston Holthaus, who had taken over their roles after former CEO Pat Gelsinger was pushed out in December by the Intel board over a perceived failure to revamp Intel’s product lineup.

A key challenge for Tan would be creating an artificial intelligence (AI) accelerator chip to rival Nvidia Corp., which has raced past Intel in revenue and valuation over the past two years on the back of an AI computing boom.

Gelsinger, who was forced out of his role in under four years of taking the helm, had sought to transform Intel into a contract manufacturer for outside clients, but those plans are in the early stages.

Tan has, however, indicated that he would pursue that path.

“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,” he said in the memo, which was posted on Intel’s website. “That’s what this moment demands of us as we remake Intel for the future.”

Intel’s processors are still the main component in about 70% of the world’s personal computers and server machines, with its factories still making up a large chunk of worldwide capacity for advanced manufacturing.

Apart from Nvidia,  Advanced Micro Devices Inc. (AMD) has been snapping at Intel’s heels by cornering market share in PCs and servers, besides venturing into AI chips.

Malaysian-born Tan grew up in Singapore, and holds a Bachelor of Science in physics from Nanyang Technological University.

He also holds a Master of Science in nuclear engineering from the Massachusetts Institute of Technology and an MBA from the University of San Francisco.

In 2022, he received the Robert N. Noyce Award, the Semiconductor Industry Association’s highest honor.

Intel chairman Frank Yeary said in a statement that Tan can leverage his experience reinventing Cadence. Tan “drove a cultural transformation centered on customer-centric innovation,” he said.

“During his time as CEO, Cadence more than doubled its revenue, expanded operating margins and delivered a stock price appreciation of more than 3,200%,” Yeary said. “He also knows Intel well, both as a partner when he ran Cadence and having recently served on our board.”