Intel today announced its new CEO is Lip-Bu Tan, a semiconductor industry veteran who has focused on software but nonetheless is very familiar with Intel.
Tan previously was CEO of Cadence Design Systems, which makes software products used to design and verify complex electronic systems. Cadence’s toolset is used by Intel and all of the other major chip designers. It specializes in electronic design automation (EDA) software, which is used for designing integrated circuits, simulation and verification, PCB design, and optimizing designs so they can be produced efficiently and cost-effectively.
Tan was previously a member of Intel’s board, but he left last year, citing other commitments. Reuters reports that Tan disagreed with the board over the direction the company was taking in its painfully slow turnaround strategy. With his appointment as CEO, he returns to the board of directors.
Effective March 18, Tan replaces interim co-CEOs David Zinsner and Michelle Johnston Holthaus. They took over in December when former Intel CEO Patrick Gelsinger was forced into retirement. Zinsner will remain executive vice president and CFO, and Johnston Holthaus will remain CEO of Intel Products.
Tan’s appointment appears to have met with investor approval, as Intel shares rose more than 12% in extended trading on Wednesday. The news was also greeted positively by analysts.
“This is welcome news for Intel Corporation, as it appoints an industry veteran that has intrinsic understanding of the semiconductor industry, both from a product design aspect as well as the needs of enabling chip manufacturing – an area that Intel Foundry needs help in making their tools more user friendly and accessible for potential customers,” said Jack Gold, president of J.Gold Associates.
“I think he understands the business well,” said Alvin Nguyen, senior analyst with Forrester Research. “There are very few people Intel could have brought in with the right background, and he was one of them.”
Nguyen also gave Tan high marks for his time at Cadence. “He was able to keep them relevant of in terms of keeping the platform to design on. But it’s a different part of the semiconductor industry. Success there doesn’t mean success at Intel, so I’m looking forward to seeing how he addresses things,” said Nguyen.
Tan is coming into a chaotic situation. Intel has gone through four (one set of co-CEOs) CEOs in the last seven years, it has seen significant erosion of market share, and its stock has dropped 60% in value in the past year, to the point that Intel was removed from the Dow Jones Industrial Average and replaced with Nvidia.
There have been rumors for some time that Intel is up for sale, with everyone from Broadcom to Elon Musk rumored to be the buyer. There has also been talk of splitting the company, with the fabs going to one customer – most notably Taiwan Semiconductor Manufacturing Company (TSMC) – and the semiconductor business going to another. Tan’s appointment should put those rumors to rest, experts say.
“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 roadmap,” Tan said in a statement issued by Intel. “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.”
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. In 2022, he received the Robert N. Noyce Award, the Semiconductor Industry Association’s highest honor, according to Intel.