By Connor Hart
Intel named Lip-Bu Tan as its new chief executive, selecting a former board member and longtime industry executive to help turnaround the beleaguered semiconductor company.
Tan, the former CEO of Cadence Design Systems, is joining a onetime industry-leading semiconductor manufacturer that has lost market share and struggled to execute a strategy to keep up with other chip makers.
Intel stock rose 13%, to $23.28, in after-hours trading Wednesday following Tan's appointment. Shares have lost more than half their value over the past year, underperforming both the market and its competitors, although deal speculation has helped push shares up so far this year.
Tan, who has more than 20 years of semiconductor and software experience, served on Intel's board for about two years before stepping down in August. During his tenure at Cadence, he helped turn around that company, focusing on what Intel said was customer-centric innovation that helped double revenue, expand operating margins and send the stock higher.
"We will work hard to restore Intel's position as a world-class products company" and chips foundry, Tan said Wednesday in a message to employees. "That's what this moment demands of us as we remake Intel for the future."
Intel led U.S. chip making for decades, but fell from that perch in recent years after a series of manufacturing missteps and an artificial-intelligence boom that shifted demand away from its central processing chips. Former Chief Executive Pat Gelsinger was ousted in December after his turnaround effort stalled.
Nvidia has surpassed Intel as the most valuable semiconductor company in the U.S., gaining about $3 trillion in market value since 2021, while Intel has lost $150 billion. Qualcomm and Tesla have explored hiring Intel to produce chips for them, but backed off.
Intel executives have entertained potential deals that would shore up its position as it put in place new leaders, including creating a separate board for its manufacturing business or exploring options with potential new investors or customers. Some analysts saw that as a move that could lead to a breakup.
Intel's rivals Taiwan Semiconductor Manufacturing Co. and Broadcom had each been having preliminary and informal conversations about striking deals, including breaking up Intel, The Wall Street Journal reported last month.
David Zinsner, the company's interim co-chief executive, said last month that the process was in the "early stages."
Tan will step into the permanent role effective March 18, succeeding co-CEOs Zinsner and Michelle Johnston Holthaus. The two stepped into that position in December, following the abrupt retirement of Pat Gelsinger.
Gelsinger was in the middle of a multiyear turnaround strategy that involved spending billions of dollars building new factories and growing a contract chip-manufacturing business.
The contract chip-making business has struggled to find major customers, while Intel's core business of making chips for personal computers and servers has been challenged amid an artificial-intelligence boom that has largely benefited its rival Nvidia.
Tan said he sees significant opportunities to remake Intel's business to better serve customers and create value for shareholders. "Intel has a powerful and differentiated computing platform, a vast customer installed base and a robust manufacturing footprint that is getting stronger by the day as we rebuild our process technology road map," he said.
With Tan's appointment, Zinsner will return to his role of chief financial officer and executive vice president, and Johnston Holthaus will remain CEO of Intel Products. Frank Yeary, who assumed the role of interim executive chair during the CEO search, will revert to being the independent chair of the board.
Write to Connor Hart at Connor.Hart@wsj.com
(END) Dow Jones Newswires
March 12, 2025 17:27 ET (21:27 GMT)
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