Intel names new CEO as the struggling chip maker eyes a change in fortunes
Intel has announced the appointment of Lip-Bu Tan as its new CEO, marking a significant step in the company's efforts to revitalize its position in the semiconductor industry. The move has been met with enthusiasm from Wall Street, with Intel's stock price jumping over 14% on the news.
Tan, a seasoned semiconductor industry veteran and former CEO of Cadence Design Systems, replaces interim co-CEOs David Zinsner and MJ Holthaus, who stepped in after the departure of Pat Gelsinger in December.
A fresh start amid challenges
Intel’s decision to bring in Tan marks the end of a turbulent period for the chipmaker, which has struggled to keep pace in the artificial intelligence boom and has shed billions in market value. Under Gelsinger’s leadership, the company faced skepticism over its turnaround strategy, culminating in his forced exit late last year.
The appointment of Tan has also been met with optimism from industry analysts, with Deutsche Bank’s Ross Seymore calling it a “desirable outcome.” UBS analyst Timothy Arcuri highlighted Tan’s strong relationships with China and Taiwan as a potential advantage, while Bernstein’s Stacy Rasgon praised his customer-first approach, which Intel has been lacking.\
Tan’s track record: A turnaround specialist
Although relatively unknown to the public, Tan is widely respected in the semiconductor industry. His career is defined by strategic bets on chip startups and a deep understanding of the evolving landscape of chip design and manufacturing.
Born in Malaysia and raised in Singapore, Tan studied nuclear engineering at MIT before moving to California for business school. He founded venture capital firm Walden International in 1987, making early investments in companies like Annapurna Labs, which Amazon later acquired, and Nuvia, which Qualcomm purchased for $1.4 billion.
As CEO of Cadence from 2009 to 2021, Tan spearheaded the company’s revival, aligning it closely with Taiwan Semiconductor Manufacturing Company (TSMC) and securing major clients like Apple. Over his tenure, Cadence’s stock price skyrocketed by 3,200%, demonstrating his ability to create shareholder value.
Intel’s road to recovery
Intel has faced significant headwinds, including a two-thirds drop in its market value in 2024 and its lowest stock price in over a decade. The company also suffered its worst decline in 50 years after slashing 15% of its workforce and issuing weak financial results. Reports surfaced that Qualcomm, Broadcom, and TSMC had explored potential takeover or breakup scenarios.
Tan’s appointment is seen as a crucial step in Intel’s fight to regain its footing. His deep connections with the chip industry’s biggest players could help reposition Intel as a key player in AI and semiconductor manufacturing.
A high-stakes compensation package
Intel is offering Tan a lucrative compensation package tied to the company’s long-term performance. His base salary will be $1 million, with an annual bonus of up to $2 million. He will receive stock units worth $14.4 million and a performance grant of $17 million, both of which vest over five years and depend on Intel’s stock performance. Additionally, he will be granted $9.6 million in stock options and a $25 million new-hire equity grant.
In total, Tan’s package includes about $66 million in long-term equity awards and options. He has also agreed to personally purchase $25 million in Intel shares, further aligning his interests with shareholders.
The road ahead
Tan’s leadership marks a critical inflection point for Intel as it seeks to reclaim its status as a semiconductor powerhouse. His track record suggests a focus on strategic partnerships, operational efficiency, and fostering innovation. Whether he can steer Intel back to dominance remains to be seen, but Wall Street is already betting on his ability to lead a successful turnaround.
