Intel Appoints Lip-Bu Tan as New CEO Amid Transition

Intel, the well-known semiconductor company, has appointed Lip-Bu Tan as its new CEO. This announcement follows the retirement of Pat Gelsinger, who stepped down from his role and the company’s board three months ago. During the interim, Intel's Chief Financial Officer David Zinsner and Executive Vice President of Client Relations Michelle Johnston Holthaus acted as co-CEOs.

Tan, who previously served as the CEO of Cadence Design Systems, is taking the lead at Intel at a time when the company faces significant challenges and opportunities within the semiconductor industry.

When Gelsinger took over in February 2021, Intel was already navigating rough waters and losing ground to competitors in the semiconductor market. This was partly due to earlier setbacks, such as missing out on the smartphone boom and issues related to chip manufacturing.

During his leadership, Gelsinger implemented a modernization strategy known as IDM (integrated device manufacturing). The strategy began with a substantial $20 billion investment to establish two new chip manufacturing facilities in Arizona, aiming to enhance chip production both in the U.S. and internationally.

In 2022, Intel unveiled further elements of the IDM framework, which included a comprehensive approach to chip production involving Intel's own facilities, collaboration with third-party manufacturers, and the expansion of its foundry services. This involved an agreement to acquire Tower Semiconductor for $5.4 billion, although this deal faced regulatory issues and was ultimately canceled in the summer of 2023. In response to this setback, Intel has been working to make its Chip Foundry division an independent subsidiary as of September 2024.

Gelsinger’s time at Intel was marked by turbulent events, such as a dramatic decline in the company’s stock price—approximately 50% from the start of 2024 to his exit in December. The company announced significant layoffs, reducing about 15% of its workforce, equating to around 15,000 jobs, citing challenges in keeping pace with the rapid AI advances in comparison to competitors.

Since Gelsinger's retirement, Intel has faced additional difficulties, including delays in opening a new chip factory in Ohio and opting not to release its Falcon Shores AI chips to market.

However, with Tan now at the helm, there are signs that Intel could be moving in a positive direction. The company recently secured a grant of $7.865 billion from the U.S. Department of Commerce for domestic semiconductor manufacturing, facilitated by the U.S. Chips and Science Act. Of this amount, $2.2 billion has already been allocated according to Intel's fourth-quarter earnings report. Additionally, Intel saw a boost in the popularity of its Arc B580 graphics card, which sold out following strong early reviews.

Intel, CEO, semiconductor