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Intel Corporation has announced the appointment of Lip-Bu Tan as its new Chief Executive Officer, marking a significant transition for the semiconductor giant as it works to recover from a challenging period under former CEO Pat Gelsinger. Following the announcement, Intel’s stock surged by 12% in after-hours trading.
Prior to this role, Tan served as the CEO of Cadence Design Systems, a company providing essential software for leading chip manufacturers, including Intel itself. Although he was a member of Intel’s board until last year, he stepped down, citing other commitments.
Tan takes over from interim co-CEOs David Zinsner and MJ Holthaus, who stepped in after Gelsinger’s exit in December. He is also rejoining Intel’s board of directors.
This leadership change signals the conclusion of a turbulent phase in Intel’s history, characterized by investor demands for cost reductions and strategic restructuring, driven by falling sales and challenges in penetrating the rapidly growing artificial intelligence sector.
In a statement on Intel’s website, Tan emphasized the importance of asserting strengths while also addressing weaknesses: “In areas where we have momentum, we need to double down and extend our advantage. In areas where we are behind the competition, we need to take calculated risks to disrupt and leapfrog. And in areas where our progress has been slower than expected, we need to find ways to pick up the pace.”
With Tan at the helm, he becomes the fourth permanent CEO Intel has appointed in a span of just seven years. Following Brian Krzanich’s resignation in 2018 over inappropriate conduct, Bob Swan took over in early 2019 but was ousted in 2021 after facing multiple challenges, including competitive pressure and production delays. Gelsinger then attempted to shift the company’s focus toward becoming a foundry, enabling the manufacture of chips for external clients alongside its own products. However, overall revenue from Intel’s products continued to decline amid significant capital expenditures associated with large-scale production, exemplified by the construction of a $20 billion facility in Ohio.
Last fall, Intel faced severe scrutiny after a disappointing earnings report which led to speculation about a potential sale, igniting interest from other tech rivals such as Qualcomm. Analysts also pondered the feasibility of Intel divesting either its foundry or products division, encompassing server and PC chips.
In the realm of artificial intelligence, Intel has struggled to keep pace with competitors like Nvidia, whose graphics processing units (GPUs) have gained prominence as the preferred choice for developers in recent years.
Frank Yeary, who served as the interim executive chair during the search for a new CEO, commented in a press release that Tan possesses a “proven track record of creating shareholder value.” Yeary expressed enthusiasm about Tan’s leadership at a critical time for the company, stating, “We are delighted to have Lip-Bu as our CEO as we work to accelerate our turnaround and capitalize on the significant growth opportunities ahead.” Yeary will return to his previous role as independent chair.
Earlier this year, Intel released a cautious forecast despite exceeding earnings and revenue expectations. The company cited seasonality, economic conditions, and growing competition as factors affecting their performance, noting that clients were working through existing inventories and the introduction of tariffs was contributing to uncertainty, as Zinsner highlighted.
Looking ahead, Intel confirmed that Zinsner will resume his duties as CFO, while Holthaus will continue to lead Intel Products.
In a notable shift in the market landscape, Intel was removed from the Dow Jones Industrial Average last November, replaced by Nvidia, illustrating the stark contrast in fortunes within the semiconductor industry. Over the past year, Intel’s shares have plummeted by 60%, while Nvidia’s stock has soared by 171%. As of the close on Wednesday, Intel’s market capitalization stood at approximately $89.5 billion, significantly less than one-thirtieth of Nvidia’s valuation.
WATCH: Intel appoints Lip-Bu Tan as CEO
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