Intel’s stock is soaring after Lip-Bu Tan, a respected veteran in the semiconductor industry, was chosen as its new CEO. The appointment comes three months after the chipmaker, which falling behind in the A.I. race pushed out former head Pat Gelsinger.
“I am honored to join Intel as CEO,” said Tan, 65, in a statement. “I have tremendous respect and admiration for this iconic company, and I see significant opportunities to remake our business in ways that serve our customers better and create value for our shareholders.”
Tan is set to start his new role on March 18, replacing interim co-CEOs David Zinsner and Michelle Johnston Holthaus. Investors seem pleased by the decision, with the California-headquartered company’s stock jumping nearly 16 percent today (March 12).
Who is Lip-Bu Tan?
The incoming executive has deep ties to Intel. Tan formerly served on the company’s board and led Cadence Design Systems, an Intel supplier, from 2009 to 2021 during a time marked by rising revenue, operating margins and stock price. Tan, who has degrees in physics, nuclear engineering and business administration, is additionally a major tech and semiconductor investor via Walden International, a venture capital firm he founded back in the 1980s.
Tan’s “solid track record of success” and previous involvement with Intel are positive signs that he could turn around Intel, said Bank of America analysts in a client note reported by CNBC. His experience in investing gives him a “breadth of relationships and investments” across the semiconductor markets in both the U.S. and Asia, the analysts said.
Analysts are hoping Tan will restore former glory to Intel, whose share price fell around 60 percent last year despite an ambitious turnaround plan led by Gelsinger to emphasize contract manufacturing.
Tan has signaled that contract manufacturing is still a key component of his vision for Intel. “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,” he said in a letter to employees yesterday (March 12). “That’s what this moment demands of us as we remake Intel for the future.”
If the incoming CEO’s past frustrations with Intel are any indication, layoffs could also be on the cards. Tan, who is now set to rejoin Intel’s board of directors again, resigned from the board last year amid clashes over the company’s bloated workforce. Besides expressing dissatisfaction with the pace of Intel’s A.I. innovation, he was reportedly vexed by its bureaucracy and urged for more cuts to Intel’s middle managers.
“I am never deterred by challenges,” Tan said in his letter. “As I prepare to come on board, I believe we have a truly unique opportunity to remake our company at one of the most pivotal moments in its history.”
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