Dive Brief:
- Lip-Bu Tan will take over as CEO of Intel as the chipmaker sets on a turnaround plan, according to a Wednesday announcement. Tan succeeds interim co-CEOs David Zinsner and Michelle (MJ) Johnston Holthaus, who assumed their roles in December following the retirement of then-CEO Pat Gelsinger.
- Tan, who will join the company Tuesday, has served as a board member for multiple technology companies and spent more than a decade leading Cadence Design Systems as its CEO. Tan also served as executive chairman at SambaNova Systems.
- “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 the announcement.
Dive Insight:
Tan's appointment kicks off a new chapter at the storied chipmaker, which in recent years struggled amid falling revenues, a failed acquisition and heated competition in the semiconductor market.
Gelsinger, a 30-year veteran of Intel, became CEO in 2021 and set an ambitious turnaround plan that included an expansion of the company's semiconductor manufacturing. As the company invested to back the plan, revenues fell precipitously from $79 billion in fiscal year 2021 to $53 billion in FY-2024.
"They've made some really, really big bets and investments, particularly in manufacturing," said Raymond Paquet, distinguished VP analyst at Gartner. "In fairness to Intel, those bets don't pay off right away. When you build a new semiconductor manufacturing facility, you don't get revenue instantly, and you don't get it up to full capacity instantly either."
In a letter to employees, Tan laid out intentions to regain momentum at the company, including a redoubled push to expand Intel's foundry business.
"Together, we will work hard to restore Intel’s position as a world-class products company, establish ourselves as a world-class foundry and delight our customers like never before," said Tan. "That’s what this moment demands of us as we remake Intel for the future."
Intel's new leadership will be working to gain the trust of employees and shareholders, said Alvin Nguyen, senior analyst at Forrester, in a Thursday email.
"Their immediate priorities should be shoring up confidence in Intel among investors and employees, as well as creating positive momentum with both Products and Foundry businesses," said Nguyen.
For CIOs, the task ahead is to track upcoming Intel product releases, closely watching whether Intel Xeon processors can perform against AMD data center processors, or if Intel GPUs "can establish a foothold against Nvidia in the AI market," Nguyen said.
Intel's push toward the AI PC market, a strategy kicked off under Gelsinger's tenure, is expected to continue, according to Paquet.
"What they need to do a better job of is identifying the workloads that are going to be on the PC from an AI perspective and what the right configuration is," Paquet said. "They have the pieces here to do this."
