Intel names Lip-Bu Tan CEO to orchestrate turnaround at chipmaker

Intel said on Wednesday that it had appointed Lip-Bu Tan as its new CEOas the chipmaker attempts to recover from a tumultuous four-year run under Pat Gelsinger. The stock jumped 12% in extended trading.

Tan was previously CEO of Cadence Design Systems, which makes software used by all the major chip designers, including Intel. He was an Intel board member but departed last year, citing other commitments.

Tan replaces interim co-CEOs David Zinsner and MJ Holthaus, who took over in December when former Intel CEO Patrick Gelsinger was ousted. Tan is also rejoining Intel’s board.

The appointment closes a chaotic chapter in Intel’s history, as investors pressured the semiconductor company to cut costs and spin off businesses due to declining sales and an inability to crack the booming artificial intelligence market.

“In areas where we have momentum, we need to double down and extend our advantage,” Tan said in statement 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 becomes the fourth permanent CEO at Intel in seven years. Following Brian Krzanich’s resignation in 2018, after the revelations of an inappropriate relationship with an employee, Bob Swan took the helm in Jan. 2019. He departed two years later after Intel suffered numerous blows from competitors and chip delays. Swan was succeeded by Gelsinger in 2021.

Gelsinger took over with a bold plan to transform Intel’s business to manufacture chips for other companies in addition to its own, becoming a foundry. But Intel’s overall products revenue continued to decline, and investors fretted over the significant capital expenditures needed for such massive chip production, including constructing a $20 billion dollar factory complex in Ohio.

Last fall, after a disappointing earnings report, Intel appeared to be for sale, and reportedly drew interest from rival companies including Qualcomm. Analysts assessed the possibility of Intel spinning off its foundry division or selling its products division — including server and PC chips — to a rival.

In AI, Intel has gotten trounced by Nvidiawhose graphics processing units (GPUs) have become the chip of choice for developers over the past few years.

Frank Yeary, who assumed the role of interim executive chair during the CEO search, said in a press release that Tan has a “proven track record of creating shareholder value.”

“We are delighted to have Lip-Bu as our CEO as we work to accelerate our turnaround and capitalize on the significant growth opportunities ahead,” said Yeary, who is now returning to the independent chair position.

In January, Intel issued a weak forecast even as it beat on earnings and revenue. The company pointed to seasonality, economic conditions and competition, and said clients are digesting inventory. The prospect of tariffs was adding to the uncertainty, Zinsner said at the time.

Intel said that Zinsner will return to his previous role of CFO. Holthaus will remain in charge of Intel Products.

Intel was removed from the Dow Jones Industrial Average in November and was replaced by Nvidia, reflecting the dramatic change of fortune in the semiconductor industry. Intel shares lost 60% of their value last year, while Nvidia’s stock price soared 171%. At Wednesday’s close, Intel’s market cap was $89.5 billion, less than one-thirtieth of Nvidia’s valuation.

WATCH: Intel appoints Lip-Bu Tan as CEO