Intel, once a towering figure in Silicon Valley and a key player in the semiconductor industry, is on a mission to reclaim its former glory. The company has just announced Lip-Bu Tan, a seasoned business and tech leader, as its new CEO.
At 65, Mr. Tan has taken on the challenging task of reviving Intel, which has struggled significantly in recent years. Once a titan in tech circles, the company has faced hurdles in innovation and has lagged in capturing market share in chips for smartphones and AI applications.
Intel’s predicament reached a critical point last year, prompting the dismissal of its CEO, Patrick Gelsinger, and a reduction of its workforce by 15,000. Over the past year, the company’s stock value has plummeted by 54%.
These struggles have attracted the attention of the U.S. government, especially as lawmakers push to rebuild the domestic chip industry after a pandemic-induced shortage led to the halt of operations in U.S. auto factories. Under the bipartisan CHIPS Act, Intel secured $8.5 billion in federal funds for plants in Arizona, Ohio, and New Mexico. However, the company’s ongoing issues have cast doubt on the completion of these projects.
Amidst these challenges, discussions with Intel’s leadership were initiated by the Trump administration this year, focusing on restoring the company’s standing as a key player in semiconductor manufacturing—a status held by few others in the nation. One idea tabled was enlisting Taiwan Semiconductor Manufacturing Company, the world’s leading chipmaker, to take over Intel’s struggling manufacturing operations. According to The New York Times, Frank Yeary, Intel’s chairman, was open to this possibility.
The responsibility to steer Intel’s future now lies with Mr. Tan. The company stands as one of the few globally that designs and manufactures semiconductors. There has been industry chatter, including from former board members, suggesting a split of these two functions.
Investors appeared encouraged by the news of Mr. Tan’s appointment, with Intel’s stock surging more than 11% in after-market trades.
Known for his commitment to Silicon Valley, Mr. Tan is one of the rare investors who continued to back semiconductor and tech hardware startups when peers turned their focus to the safer waters of software and internet services. Leading the venture capital firm Walden International, he also had a lengthy tenure as CEO of Cadence Design Systems, a top dog in chip design software. He is credited with revamping Cadence, propelling the company to a market value exceeding $65 billion.
Beyond Intel, Mr. Tan remains active in several small and midsize tech hardware firms. Last May, he was appointed executive chairman of SambaNova Systems, a direct competitor to Nvidia in the AI chip market. He also chairs Credo Technology Group Holding, which specializes in communications chips.
However, Mr. Tan’s track record isn’t without controversy. His investments in Chinese AI and semiconductor firms have drawn scrutiny. In 2023, a congressional committee focused on China requested details from him about Walden International’s investments in blacklisted companies due to national security concerns.
