Struggling chipmaker Intel on Wednesday named former board member Lip-Bu Tan as its CEO effective March 18, more than three months after the it ousted company veteran Pat Gelsinger.
Tan, a well-respected semiconductor industry veteran, has long been seen as a CEO contender. He was approached by Intel’s board in December, Reuters had reported, to gauge his interest in taking up the job.
Shares of the company rose 12% in extended trading.
Intel is undergoing a historic transition as it attempts to emerge from one of its bleakest periods. While struggling to cash in on a boom in investment in advanced AI chips, the company is spending heavily to become a contract manufacturer of chips for other companies, leading some investors to worry about pressure on its cash flows.
Tan is a longtime technology investor with more than 20 years of industry experience. He formerly served as CEO of Intel supplier Cadence Design Systems from 2009 to 2021, and was on its board.
“The street seems to like it. He is a semiconductor industry veteran with an active eye on AI startups but he knows how to operate, so looks like a good move overall,” said Ben Bajarin, principal analyst at consulting firm Creative Strategies.
Tan left Intel’s board last year over disagreements on how to turn around the company. He felt Intel had too many layers of middle management and that the chip contract manufacturing effort was insufficiently customer-centric, Reuters previously reported. Tan will rejoin the board, Intel said.
The most consequential decision faced by Tan will be whether to keep Intel’s chip design and manufacturing operations together or split them apart.
Reuters reported that Intel rival Taiwan Semiconductor Manufacturing has approached some of Intel’s biggest potential manufacturing customers about forming a joint venture to operate Intel’s factories.
The statement from Intel announcing the CEO appointment made no mention of any changes that might be afoot at the company.
