Intel gets new CEO Tan Lip-Bu, a chip industry veteran who grew up in Singapore
Lip-Bu Tan in an undated photo. Courtesy Intel
Intel on Wednesday (Mar 12) named former board member and chip industry veteran Tan Lip-Bu as its CEO and signalled the struggling but storied chipmaker was unlikely to split up its chip-design and manufacturing operations.
The appointment, effective Mar 18, comes three months after Intel ousted CEO and company veteran Pat Gelsinger, whose costly and ambitious plan to turn the company around was faltering and sapping investor confidence.
Tan, a former Intel board member, had been seen as a CEO contender thanks to his deep experience in the chip industry as well as a longtime technology investor in promising startups. He was approached by Intel's board in December to gauge his interest in taking up the job, Reuters had reported.
"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," Tan said in a letter to Intel employees on Wednesday.
Intel shares surged 12 per cent in extended trading on Wednesday, and analysts welcomed the move that they said was likely to bring some stability to the chipmaker. The company's stock had declined 60 per cent in 2024.
Intel is undergoing a historic transition as it attempts to emerge from one of its bleakest periods.
While struggling to cash in on a boom in investment in advanced AI chips that has fired up the fortunes of market leader Nvidia and other chipmakers, the company is spending heavily to become a contract manufacturer of chips for other companies, leading some investors to worry about pressure on its cash flows.
Media reports in the past two months said chip rivals including Broadcom were evaluating Intel's chip design and marketing business, while TSMC has separately studied controlling some or all of Intel's chip plants, potentially as part of an investor consortium or other structure.
Reuters reported on Tuesday that TSMC had approached some of Intel's biggest potential manufacturing customers about forming a joint venture to operate Intel's factories, after US President Donald Trump's administration requested TSMC to help turn around the troubled chipmaker.
"This (Tan's appointment) is welcome news," said Jack E Gold, analyst and president of J Gold Associates, which covers the chip industry.
Tan has an "intrinsic understanding of the semiconductor industry, both from a product design aspect as well as the needs of enabling chip manufacturing - an area that Intel Foundry needs help in making their tools more user-friendly and accessible for potential customers," he said.
Gold and other analysts agreed that Tan's messaging looked like he wanted to keep the company together, though they said any transformation of the chipmaker would take years and require investors to be patient.
Who is Intel's new CEO Tan Lip-Bu?
Tan is a respected veteran of the semiconductor industry who received the Semiconductor Industry Association's highest honour in 2022 - the Robert N Noyce Award - named after the American physicist who invented the first silicon microchip.
The 65-year-old Malaysian-born executive studied physics at Nanyang Technological University in Singapore. He holds a master's degree in nuclear engineering from the Massachusetts Institute of Technology, and an MBA from the University of San Francisco.
Tan believed that relatively small teams of startup engineers with good chip design ideas could successfully compete against incumbent chip giants, and he poured money into hundreds of startups.
He took a stake in Annapurna Labs, a startup later purchased by Amazon for US$370 million that has become the heart of its in-house chip division. Amazon says it now deploys more of its own central processors than it does those from Intel.
Tan has been chairperson of Walden International, a venture capital firm, since 1984 and was on the boards of Hewlett Packard Enterprise and SoftBank Group.
Tan was early to recognise a major trend that has swept the chip industry over the past 30 years - that designing chips and manufacturing them would split into two different specialties. He helmed Intel supplier and chip-design maker Cadence Design Systems between 2009 and 2021.
Over Tan's time at Cadence, the firm's stock appreciated 3,200 per cent and it landed Apple as one of its largest customers as the iPhone maker shifted away from suppliers such as Intel and toward its own chips.
Tan was appointed to Intel's board in 2022 as part of a plan to restore the company's place as the leading global chipmaker. A year later, Intel expanded his responsibilities to include oversight of manufacturing operations. However, Tan stepped down from the board last year over disagreements on how to turn around the company.
In his letter to employees, Tan described himself as someone who is "never deterred by challenges".
"I believe we have a truly unique opportunity to remake our company at one of the most pivotal moments in its history," he said.
"Under my leadership, Intel will be an engineering-focused company," Tan said.
"We will push ourselves to develop the best products, listen intently to our customers and hold ourselves accountable to the commitments we make so that we build trust."
"LONG ADMIRED"
"Intel is a company I have long admired," Tan said in his letter on Wednesday, expressing confidence in turning the business around.
Tan, 65, is a Malaysian-born executive who grew up in Singapore and holds degrees in physics, nuclear engineering and business administration.
He served as CEO of Intel supplier and chip-design software Cadence Design Systems from 2009 to 2021. During his term, the company's revenue and stock surged.
Tan left Intel's board last year over disagreements on how to turn around the company. He grew frustrated by the company’s large workforce, its approach to contract manufacturing and Intel’s risk-averse and bureaucratic culture, Reuters previously reported.
Tan will rejoin the board, Intel said.
Tan "brings stability and experience to a role that needs someone of his caliber, which is why I believe the company will likely stay the course with his appointment and continue to develop foundry and product", said Anshel Sag, principal analyst at Moor Insights & Strategy.
Tan's appointment comes as Trump pushes for more manufacturing in the country, threatening tariffs on imports that have roiled global markets for weeks.
While Trump has made no direct comment about Intel publicly, he has said that Asian countries including Taiwan have snatched away the United States' edge in chipmaking.
Earlier this month, Intel rival TSMC said at a press event with Trump that it plans to make a fresh US$100 billion investment in the US that involves building five additional chip facilities.
Trump, though, is trying to kill a 2022 bipartisan law to give US$52.7 billion in subsidies for chips, under which Intel has received grants.
