Lip-Bu Tan steps in as Intel’s new CEO amid financial challenges and pressure to compete with Nvidia
Intel has appointed Lip-Bu Tan as its new chief executive officer, marking a leadership shift as the US chipmaker faces pressure to recover from financial struggles and competition in the artificial intelligence sector.
According to CNBC, the company announced the decision on Wednesday, and its stock rose 12 percent in extended trading.
Tan, the former CEO of Cadence Design Systems, brings extensive experience in the semiconductor industry. He previously served on Intel’s board before stepping down in August 2024 due to other commitments.
His appointment follows a period of interim leadership under co-CEOs David Zinsner and Michelle (MJ) Johnston Holthaus, who took over in December after Intel removed Pat Gelsinger from the role. Tan will also rejoin the board.
His leadership arrives at a critical time as Intel attempts to stabilize its business amid declining sales, increased competition, and investor concerns over the company’s strategic direction.
Investors have pressured the semiconductor giant to cut costs and consider spinning off divisions to address its challenges.
“In areas where we have momentum, we need to double down and extend our advantage,” Tan stated on Intel’s website.
“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.”
Tan is Intel’s fourth permanent CEO in seven years. Brian Krzanich resigned in 2018 after revelations of an inappropriate relationship with an employee.
Bob Swan replaced him in 2019 but departed two years later as Intel faced delays in chip production and increasing competition.
Gelsinger, who succeeded Swan in 2021, introduced a strategy to transition Intel into a foundry business, manufacturing chips for other companies in addition to its own.
However, declining revenue and high capital expenditures, including a US$20bn factory project in Ohio, caused investor concern.
In late 2023, following a disappointing earnings report, speculation arose that Intel might sell off parts of its business, with potential interest from Qualcomm and other competitors.
In the AI sector, Intel has struggled against Nvidia, whose graphics processing units (GPUs) have become dominant among developers. The market shift was reflected in November when the Dow Jones Industrial Average removed Intel and replaced it with Nvidia.
In 2023, Intel’s stock lost 60 percent of its value, while Nvidia’s surged 171 percent. As of Wednesday’s close, Intel’s market capitalization stood at US$89.5bn—less than one-thirtieth of Nvidia’s valuation.
Frank Yeary, who led the board’s CEO search, emphasized Tan’s experience and impact on shareholder value.
“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 said in a press release.
He will now return to his role as independent chair.
Tan expressed his commitment to reshaping Intel’s strategy. “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 better and create value for our shareholders,” he stated.
Intel’s financial outlook remains uncertain. In January, the company provided a weak forecast despite surpassing earnings and revenue expectations.
Executives cited economic conditions, competition, and seasonal factors as challenges, while concerns over potential tariffs added further uncertainty.
Zinsner will return to his role as executive vice president and chief financial officer, while Holthaus will continue leading Intel Products.
Yeary acknowledged their efforts in stabilizing the company, stating, “Their discipline and focus have been a source of stability as we continue the work needed to deliver better execution, rebuild product leadership, advance our foundry strategy and begin to regain investor confidence.”
Tan, a longtime technology investor, has over 20 years of experience in semiconductors and software.
As CEO of Cadence from 2009 to 2021, he led a transformation that doubled revenue, expanded operating margins, and increased the company’s stock price by more than 3,200 percent.
He has also been on multiple public company boards and currently sits on the boards of Credo Technology Group and Schneider Electric.
