By unusuma.lk on (LK time)
Intel on Wednesday appointed former board member and chip sector veteran Lip-Bu Tan as its CEO, signalling that the struggling but renowned chipmaker was unlikely to separate its chip-design and manufacturing divisions.
The appointment, starting March 18, comes three months after Intel removed CEO and company long-timer Pat Gelsinger, whose bold yet costly strategy to revamp the company was faltering and reducing investor trust.
Tan, a former Intel board director, was a leading CEO candidate due to his extensive expertise in the chip sector and history as a technology investor in promising startups. He was approached by Intel’s directors in December to check his interest in the position, Reuters had reported.
“Together, we will strive to restore Intel’s global position, strengthen ourselves as a leading foundry, and exceed customer expectations,” Tan stated in a letter to Intel staff on Wednesday.
Intel shares jumped 12% in after-market trading on Wednesday, and analysts welcomed the decision, saying it was likely to bring stability to the company. The stock had plunged 60% in 2024.
Intel is undergoing a major transition, attempting to recover from one of its most difficult periods.
While struggling to benefit from a boom in advanced AI chip investment that boosted rivals like Nvidia, Intel is spending heavily to become a contract manufacturer of chips, worrying some investors about its cash flow.
Media Reports in the past months suggested that chipmakers like Broadcom were considering Intel’s design and marketing business, while TSMC studied acquiring parts of Intel’s plants through a potential investor group.
Reuters reported on Tuesday that TSMC had contacted Intel’s major manufacturing clients to discuss a joint venture for operating Intel’s factories, after U.S. President Donald Trump’s administration requested assistance to revive the chipmaker.
“This news (Tan’s appointment) is encouraging,” said Jack E. Gold, analyst and president of J. Gold Associates, which specialises in the chip industry.
Tan has an in-depth knowledge of the semiconductor sector, spanning product design and manufacturing requirements, particularly in Intel Foundry where tool usability for clients needs improvement, he noted.
Gold and other analysts believe Tan’s approach suggests he intends to keep the company intact, but they acknowledge any major transformation will take years and require investor patience.
‘Long Admired’
“Intel is a company I have long respected,” Tan said in his letter on Wednesday, expressing confidence in revitalising the business.
Tan, aged 65, is a Malaysian-born executive raised in Singapore, holding degrees in physics, nuclear engineering, and business administration.
He was CEO of Intel supplier and chip-design software firm Cadence Design Systems from 2009 to 2021. During his leadership, the company’s revenue and shares soared.
Tan resigned from Intel’s board last year due to differences over the company’s restructuring, including its large workforce, contract manufacturing, and risk-averse culture, Reuters previously reported.
Tan will return to the board, Intel confirmed.
Tan “brings” stability and expertise to a role that demands someone of his calibre, which is why the company will likely continue expanding its foundry and product development, said Anshel Sag, principal analyst at Moor Insights & Strategy.
Tan’s appointment aligns with Trump’s push for more domestic manufacturing, amid tariff threats that have disrupted global markets for weeks.
Although Trump has made no direct statements on Intel, he has criticised Asian nations like Taiwan for dominating the U.S. chipmaking industry.
Earlier this month, Intel competitor TSMC announced at a press event with Trump that it plans a $100 billion investment in the U.S., including five new chip plants.
Trump, however, is attempting to repeal a 2022 bipartisan law that granted $52.7 billion in chip subsidies, which previously benefited Intel.
