Intel saw its stock jump more than 16% after the chip manufacturer announced that tech executive and former board member Lip-Bu Tan will be the company’s new CEO, effective March 18.
Tan is an accomplished technology leader with deep semiconductor industry experience and succeeds interim co-CEOs David Zinsner and Michelle Johnston Holthaus.
Tan tasked with reversing years of underperformance at Intel
Investors seem optimistic about Tan’s appointment to turn around Intel’s fortunes, a positive sentiment that drove the stock to 16% at 9:15 am on Thursday. Tan reportedly always pushed for better AI to take on Nvidia and faster decision-making in the bureaucratic firm, when he served as its chairman.
“if anyone can save Intel, its Lip, but it will take years and partners,” said a source who knows Tan and cited in a Yahoo Finance report.
According to the report Tan has a mess on his hands at the tech giant, but is not likely to spin off the company’s struggling foundry arm in the near future.
However, he could quickly inject funding into the company through a rumored partnership with Taiwan’s TSMC and government.
Former CEO Pat Gelsinger led several efforts to turn around the company, including layoffs and promised AI chips that could compete with those from Nvidia and AMD. He was however relieved of his job for failing to meet targets.
The company is upbeat about Tan’s capabilities.
“Tan is a longtime technology investor and widely respected executive with more than 20 years of semiconductor and software experiences as well as deep relationships across Intel’s ecosystem,” the company said in a statement.
According to the company, Zinsner remains executive vice president and chief financial officer, while Johnston Holthaus will remain CEO of Intel Products. Frank D. Yeary, who took on the role of interim executive chair of the board during the search for a new CEO, will revert to being the independent chair of the board upon Tan becoming CEO.
Tan was formerly the CEO of Cadence Design Systems where he more than doubled the company’s revenue and delivered a stock price appreciation of more than 3,200%. He was also on Intel’s board for two years until his departure in August 2024.
“Lip-Bu is an exceptional leader whose technology industry expertise, deep relationships across the product and foundry ecosystems, and proven track record of creating shareholder value is exactly what Intel needs in its next CEO.”
Yeary.
“Like many across the industry, I have worked closely with Lip-Bu in the past and have seen first hand how his relentless attention to customers drives innovation and success,” Yeary continued, adding the company was delighted to have Tan as the new CEO.
Intel has been struggling, but Wall Street is now upbeat.
The chipmaker has been struggling to keep pace with competitors like Nvidia which replaced Intel in the Dow Jones Industrial Average back in November 2024.
The company has also been the target of possible acquisitions and has been working with investment Bankers at Morgan Stanley and Goldman Sachs to save its business, including by splitting its foundry division although nothing has been announced.
According to reports, Tan may be one of the most powerful technology executives most people have never heard of.
“We’re encouraged by this appointment given Lip-Bu Tan’s tenure and track record of creating shareholder value as CEO of Cadence and prior experience as an Intel board member.”
KeyBanc analyst John Vinh.
Another analyst, Ruben Roy of Stifel said while Intel’s total transformation was likely to take time, Tan’s appointment alone is a long-term positive for the firm.
“We believe that Mr. Tan is uniquely qualified to attempt a reboot of Intel,” he said.
While little known to the public, his advantage is that virtually every one of Intel’s former and potential customers knows him and has done business with him, either buying one of the many startups he backed or using software from a company he ran.
Tan in his new post, said, “I am honoured to join Intel as CEO. 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 bettering create value for our shareholders.”
Tan added that Intel has a powerful and differentiated computing platform, a vast customer-installed base, and a robust manufacturing footprint that is getting stronger by day as Intel rebuilds its process technology roadmap.
“I am eager to join the company and build upon the work the entire Intel team has been doing to position our business for the future,” he added.
Tan holds a Bachelor of Science in physics from Nanyang Technological University in Singapore, a Master of Science in nuclear engineering from the Massachusetts Institute of Technology, and an MBA from the University of San Francisco.
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