Lip-Bu Takes Intel CEO Reins With A Focus On Winning Through Engineering
It took a few months, but Intel has found its next chief executive officer in Lip-Bu Tan, an industry veteran with decades of semiconductor and software experience, and founding managing partner of Walden Catalyst Ventures. He succeeds Pat Gelsinger, who abruptly retired from Intel last December amid reports he was forced out by the company's board, and takes on the task of accelerating Intel's turnaround efforts.
After Gelsinger's departure, David Zinsner and Michelle Johnston Holthaus service as interim co-CEOs until Intel could find a permanent replacement. Now that it's done that, Zinsner will retain his role as executive vice president and chief financial officer, while Holthaus will remain as CEO of Intel Products.
Tan has big shoes to fill in succeeding Gelsinger, who put into motion heavy investments into multiple foundry upgrades and expansions as part of a longer term IDM 2.0 strategy. Tan certainly has the track record to suggest he's capable of completing Intel's turnaround. As pointed out in a press release announcing his hiring, Tan served as CEO of Cadence Design Systems from 2009 to 2021, during which time he more than doubled the company's revenue and drove the firm's stock price up 3,200%.
"Lip-Bu is an exceptional leader whose technology industry expertise, deep relationships across the product and foundry ecosystems, and proven track record of creating shareholder value is exactly what Intel needs in its next CEO," Frank D. Yeary, independent chair of the board, said in a statement. "Throughout his long and distinguished career, he has earned a reputation as an innovator who puts customers at the heart of everything he does, delivers differentiated solutions to win in the market and builds high-performance cultures to achieve success."
Tan is a supremely smart individual with multiple high level degrees, including 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 (MIT), and an MBA from the University of San Francisco. He's also a 2022 recipient of the Robert N. Noyce Award, the highest honor available from the Semiconductor Industry Association.
In a letter to employees, Tan offered up some fiery remarks while also acknowledging it's been a "tough few years" for Intel's staff.
"I am joining because I believe with every fiber of my being that we have what it takes to win. Intel plays an essential role in the technology ecosystem, both in the U.S. and around the world. And, together, I’m confident we can turn our business around," Tan said.
Tan said it won't be easy, but that there's "nothing I dislike more than losing." He also promised to keep Intel focused on engineering under his leadership, which suggests he will continue to focus on the foundry side. And more vaguely, he told employees they have a "chance to do something special together," adding, "In many ways, we are the founders of 'The New Intel'."
The timing of Tan's hiring as Intel's CEO comes on the heels of rumors that rival TSMC has been engaging in talks with NVIDIA, AMD, and Broadcom about a joint venture into Intel's foundry business. There's been a lot of speculation over Intel's future since Gelsinger's departure (including talks of a spin-off), and now that the company has found some stability at the helm with Tan, it will be interesting to see how the industry as a whole reacts. Investors are certainly stoked—Intel's share price is up around 16% this morning.
Tan inherits a company that recently put into motion a bunch of cost-cutting measures, including significant layoffs that Gelsinger at the time said would help Intel navigate "tough times ahead." That said, Gelsinger's IDM 2.0 strategy and key investments have started showing signs of paying off. Intel's most recent earnings, for example, beat guidance as its 18A process node progresses towards volume production.
"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. "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."
From the outside looking in, it sounds like Tan will continue down the path Gelsinger laid out. To what extent, time will tell.
