Chip giant Intel names industry veteran Tan Lip-Bu, who grew up in Singapore, as next CEO

SAN FRANCISCO – Intel has named

Mr Tan Lip-Bu

as its next chief executive officer, entrusting a former board member and semiconductor veteran with one of the toughest jobs in the chip industry. 

Mr Tan, 65, will assume the role on March 18, the company said in a statement on March 12. He will rejoin the board, as he had stepped down in August 2024.

Mr Tan, the former head of Cadence Design Systems, is tasked with restoring the fortunes of a pioneering chipmaker that has become an industry laggard. Intel, which dominated the semiconductor field for decades, is struggling with market-share losses, manufacturing setbacks and a precipitous decline in its earnings. It is also burdened with debt and recently had to slash about 15,000 jobs.

Born in 1959 in Muar, Johor, Mr Tan grew up in Singapore, where he attended Nanyang University and studied physics. He later went to the Massachusetts Institute of Technology, gaining a master’s in nuclear engineering. He gave up his studies for a doctorate in that field and left for the University of San Francisco, where he got an MBA.

After working in venture investing, he joined the Cadence board in 2004. He became co-CEO in 2008 after incumbent Michael Fister left and then took sole possession of that role in 2009. Mr Tan ran the company for more than a decade before moving to the position of chairman, which he occupied until 2023.

In a memo to Intel employees, Mr Tan said he is confident that he can turn the business around. 

“That is not to say it will be easy. It won’t be,” he said. “But I am joining because I believe with every fibre of my being that we have what it takes to win. Intel plays an essential role in the technology ecosystem, both in the US and around the world.”

Intel shares jumped more than 10 per cent on the news, after rising 4.6 per cent in regular New York trading on March 12. The stock had been down more than 54 per cent in the past 12 months as the company’s future became increasingly murky, leaving its market value at US$89.5 billion (S$119.2 billion).

Mr Tan’s predecessor, Mr Pat Gelsinger, was

pushed out by the board

for a perceived failure to rejuvenate Intel’s product line-up. One of the most glaring challenges: Creating an artificial intelligence (AI) accelerator chip that can rival the products of Nvidia. That company, once in Intel’s shadow, has seen its revenue and valuation skyrocket over the past two years due to the AI computing boom.

“This is good for Intel,” said Bernstein analyst Stacy Rasgon. “If I had to pick somebody, Lip-Bu would have been at the top of that list.”

Mr Gelsinger had also set out to turn Intel into a chip foundry – a contract manufacturer that makes products for outside clients – but that effort is still in its early stages.

Mr Tan signalled that he will continue down that path. “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,” he said in the memo, which is posted on the company’s website.

“That is what this moment demands of us as we remake Intel for the future.”

Intel remains one of the world’s biggest chipmakers by revenue, with more than US$50 billion in annual sales. Its processors are the main component in more than 70 per cent of the world’s personal computers and server machines. The company’s factories still represent a large chunk of worldwide capacity for advanced manufacturing.

But slip-ups in product development have allowed rivals to gain an edge. Besides Nvidia, Advanced Micro Devices (AMD) has won market share in PCs and servers – and is better poised than Intel to make inroads in AI chips. In the shadow of those challenges, Intel is not even in the top 10 chip industry companies worldwide by market value. 

Cadence, along with rival Synopsys, dominates the market for computer-aided design used to create semiconductors. Their software and services have become increasingly important with the rise in complexity of the devices. Engineers use their products to create blueprints for the arrangement of tens of billions of transistors and connecting wires – the underlying architecture of the tiny components.

Intel’s new leader will have to navigate approaches from suitors and decide whether to stick with Mr Gelsinger’s stance that a break-up is unnecessary. Some on Wall Street have suggested splitting up the company’s chip design and manufacturing units, which are already separated operationally.

Qualcomm, Broadcom and Arm Holdings have explored the idea of acquiring all or part of Intel, Bloomberg News has reported. If formal approaches are made, Intel’s board will be under pressure to consider scenarios that Mr Gelsinger may have rejected.

Separately, the Trump administration approached rival Taiwan Semiconductor Manufacturing Company (TSMC) and asked it to

consider taking a stake in a spin-off of Intel’s factories

. Under that proposal, which Bloomberg News reported on in February, TSMC would run the plants and reconfigure them to use its technology – something that might make them more attractive to outside customers. Intel’s plants currently focus primarily on its own designs.

The plan also included trying to get TSMC’s biggest clients – a list that includes Qualcomm, AMD and Apple – to invest in the Intel spin-off. But that report was followed a week later by TSMC’s announcement at the White House that

it would increase investments in its own complex in Arizona

. That suggests it would prefer not to get involved in outside projects.

Intel is the biggest recipient of grants from the US government under the Chips and Science Act, a Biden administration push to reinvigorate domestic semiconductor production.

The Chips Act money, totalling nearly US$8 billion, is contingent on Intel completing milestones, including the building and equipping of new factories around the US. Intel has already delayed some of its building plans, including for a complex in Ohio. President Donald Trump has also spoken out against the programme.

Intel chairman Frank Yeary said in a separate statement that Mr Tan could leverage his experience reinventing Cadence. Mr Tan “drove a cultural transformation centred on customer-centric innovation”, he said.

“During his time as CEO, Cadence more than doubled its revenue, expanded operating margins and delivered a stock price appreciation of more than 3,200 per cent,” Mr Yeary said. “He also knows Intel well, both as a partner when he ran Cadence and having recently served on our board.”

Bernstein’s Mr Rasgon said that if Mr Tan cannot orchestrate a similar turnaround at Intel, it is “probably unfixable”. BLOOMBERG