TLDR
- Lip-Bu Tan appointed as Intel’s new CEO, replacing interim co-CEOs following Pat Gelsinger’s departure
- Intel stock jumped 11% on the news as Wall Street welcomed the appointment
- Tan faces enormous challenges in restoring Intel’s manufacturing prowess while competing with TSMC and Nvidia
- Trump administration’s opposition to the CHIPS Act threatens $8.5 billion in funding for Intel’s U.S. factories
- Tan plans to maintain Intel’s current structure rather than splitting its design and foundry businesses
Intel has appointed industry veteran Lip-Bu Tan as its new CEO, causing the company’s stock to jump by 11% in premarket trading. The announcement comes at a critical time for the once-dominant chip manufacturer, which has struggled to keep pace with rivals like Taiwan Semiconductor Manufacturing (TSMC) and Nvidia.
Tan is taking over from interim co-CEOs David Zinsner and Michelle Johnston Holthaus. They were installed temporarily after former CEO Pat Gelsinger’s resignation in December 2024.
The new CEO is no stranger to Intel. He previously served on the company’s board in 2022 but left in 2024 after disagreeing with Gelsinger on the company’s turnaround plan.
Tan brings more than 20 years of semiconductor and software experience to the role. He has an engineering background and a track record of leading a successful turnaround at Cadence Design Systems.
Many analysts view Tan as uniquely qualified to attempt a reboot of Intel. Stifel analyst Ruben Roy noted Tan’s “transformative impact” at Cadence during his 11-year tenure as CEO.
“I am honored to join Intel as CEO,” Tan said in a statement. “I have tremendous respect and admiration for this iconic company, and I see opportunities to remake our business in ways that serve our customers better and create value for our shareholders.”
Tan is taking over Intel during one of the darkest periods in the company’s history. The chipmaker has lost its manufacturing lead to TSMC and missed opportunities to dominate in the AI chip space now led by Nvidia.
Intel’s stock down 54% over the last year
Intel’s stock has plummeted 54% over the last year as the company’s revenue has declined from its pandemic highs. It now faces increased competition from longtime rival AMD and new efforts by Qualcomm to break into the PC chip market.
Reviving Intel’s chip-fabricating operations represents the most difficult part of Tan’s job. This challenge aligns with the Trump administration’s goal to revive American manufacturing and secure supply chains.
However, President Trump might make Tan’s job even harder as he campaigns to stop the CHIPS Act. This legislation would grant up to $8.5 billion in direct funding to Intel as an incentive to build new factories across the U.S.
Instead, Trump hopes to achieve similar goals through tariffs. He claims this approach encouraged TSMC to commit $100 billion of investment in the U.S.
Reports suggest the administration might not oppose TSMC taking over Intel’s chip-making facilities. This comes as Reuters reported that a consortium led by TSMC and including Nvidia and Broadcom is in talks to take over Intel’s manufacturing business.
Plans to make Intel a top chipmaker
Despite these reports, Tan told employees he’ll continue with existing plans to make Intel a top contract chipmaker. This signals he won’t split the company’s design and foundry businesses.
Intel has received billions of dollars via the CHIPS Act to help pay for new manufacturing facilities in the U.S. This includes a massive campus in Ohio that was initially slated to open in 2025 but is now delayed until 2030.
Tan will be under pressure to convince both investors and politicians that he has solutions to Intel’s problems. However, some industry observers question whether any chief executive, no matter how talented, can fully restore Intel to its former glory.
The challenge is enormous: Intel must compete with TSMC in manufacturing while also catching up to Nvidia in AI chips. With Intel’s market value at about $89 billion compared to Nvidia’s $2.8 trillion, the scale of the turnaround task is clear.
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