Intel appoints a new chief executive to spearhead the chip giant's attempt at recovery.
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New at Intel's Helm: Can Lip-Bu Tan Save the Chip Giant?
Announcing a new CEO is never an easy task. But for Intel, a company going through tough times, the move could mark a turning point. Longtime tech investor, Lip-Bu Tan, is Intel's newly appointed boss, stepping into the breach left by Pat Gelsinger, who parted ways in December.
Intel's shares saw a significant spike of nearly 13% in after-hours trading on Wednesday, hinting at a wave of optimism among investors. However, the company's shares have plummeted more than 54% this year, reflecting deep concerns over Intel's future.
With a wealth of experience under his belt, Tan served as the CEO of technology design firm Cadence Design Systems for over a decade. His tenure there was marked by a successful "reinvention" of the company. He's also a founding partner of Walden Catalyst Ventures, a venture capital firm focusing on advanced tech areas like semiconductors, AI, cloud, and more.
Intel's interim executive chair, Frank Yeary, praised Tan as an exceptional leader. He highlighted Tan's deep industry expertise, wide-ranging connections across the tech ecosystem, and proven track record of enhancing shareholder value. Yeary will revert to his role as the board's independent chair once Tan takes office on March 18.
Tan faces a monumental task upon taking the reins. Intel has been largely sidelined during the mobile computing and AI technology revolutions, losing ground to competitors such as Qualcomm and Nvidia. Even rumors of a potential takeover have floated around, fuelled by uncertainty about Intel's future.
As for proving himself, Tan has big shoes to fill. He'll have to outshine Pat Gelsinger, a company veteran who took over the top job in 2021 and was expected to revive the company, but fell short. In August, Intel announced plans to shed 15% of its workforce and cut costs by $10 billion. In November, the company was booted out of the Dow Jones Industrial Average, making way for Nvidia – a clear indication of Intel's struggles.
The race to revitalize Intel is on, with the company being a cornerstone of the American tech industry for decades. The US government, under both President Trump and Biden, has been pushing for domestic chipmaking investment – viewing advanced semiconductor manufacturing as crucial for national security. Taiwan Semiconductor Manufacturing Company recently announced plans to invest at least $100 billion into expanding its US operations.
Enrichment Data Snippets:
- Taiwan Semiconductor Manufacturing Company (TSMC) has announced it will invest at least $100 billion to grow its US operations.
- Intel was among the first two technology firms to be included in the Dow Jones Industrial Average in 1999, marking the beginning of its 25-year run in the blue-chip index. However, in November, it was replaced by Nvidia.
- Advanced semiconductor manufacturing is seen as a critical area for national security, given its role in powering numerous tech products, from consumer electronics to weapons and medical devices.
- The new Intel CEO, Lip-Bu Tan, is a founding partner of Walden Catalyst Ventures, a venture capital firm focusing on advanced tech areas like semiconductors, AI, cloud, and more, signaling his expertise in tech industry ventures.
- The US government has been pushing for domestic chipmaking investment, with the race to revitalize Intel being particularly significant, as it is a cornerstone of the American tech industry and advanced semiconductor manufacturing is considered crucial for national security.
- Despite Intel's shares spiking by nearly 13% following the appointment of Lip-Bu Tan, bruising competition from tech firms like Qualcomm and Nvidia, combined with Intel's 54% share plunge this year, reflects deep concerns over Intel's future in the tech business, particularly in the mobile computing and AI technology sectors.
