In a significant leadership change, Intel Corporation has appointed Lip-Bu Tan as its new Chief Executive Officer, effective March 18, 2025. This move comes after Intel ousted its former CEO Pat Gelsinger following concerns about his ambitious turnaround strategy, which struggled to gain investor confidence. Tan, a seasoned semiconductor industry veteran and a former Intel board member, has a rich background in the tech industry. His appointment reflects Intel's commitment to retaining its combined chip design and manufacturing operations, despite growing speculation that the company may split its core business functions.
 

The appointment of Lip-Bu Tan arrives at a crucial juncture for Intel. The company's ambitious plan to regain dominance in the semiconductor industry, particularly in the advanced AI chip sector, has been met with financial challenges. While competitors like Nvidia have flourished in the booming AI chip market, Intel has struggled to capitalize on this growth. Meanwhile, Intel has been heavily investing in establishing itself as a contract manufacturer for other tech companies, raising concerns among investors about cash flow and long-term stability. Following the announcement of Tan's appointment, Intel shares experienced a significant 12% surge in extended trading on Wednesday. Analysts welcomed the leadership change, believing that Tan's extensive knowledge and experience in both chip design and manufacturing could provide much-needed stability to the troubled company.
 

Background and Experience of Lip-Bu Tan

Lip-Bu Tan's extensive background in the semiconductor industry has positioned him as a valuable asset for Intel during this transitional phase. Before joining Intel, Tan served as CEO of Cadence Design Systems, a prominent Intel supplier and chip-design software provider, from 2009 to 2021. Under his leadership, Cadence experienced impressive growth in both revenue and stock value. Tan previously resigned from Intel’s board in 2024 due to disagreements regarding the company’s operational strategies, particularly its contract manufacturing model and workforce management. However, Tan’s return to Intel, now as CEO, signifies a renewed focus on stabilizing the company’s chip manufacturing operations without resorting to a corporate split. In a letter to Intel employees, Tan expressed his commitment to rebuilding the company’s reputation as a world-class chip producer and foundry. He highlighted his goal to “delight customers like never before” and strengthen Intel’s market presence.
 

Intel’s Struggles and Strategic Moves

Intel’s struggles in recent years have been compounded by challenges in the advanced AI chip sector, where competitors like Nvidia have thrived. Additionally, media reports earlier this year indicated that chipmakers such as Broadcom were evaluating Intel’s chip design and marketing divisions. Meanwhile, industry giant TSMC had reportedly considered taking control of Intel’s chip plants through a joint venture model. In a surprising development, Reuters reported that TSMC had approached some of Intel’s potential manufacturing clients about forming a collaborative venture to manage Intel’s factories. This move was reportedly encouraged by the administration of US President Donald Trump, who has been advocating for greater domestic manufacturing investment.
 

Political Pressure and US Manufacturing Push

Tan's appointment comes at a time when Donald Trump has been vocal about the need to strengthen US-based chip manufacturing. Trump’s protectionist stance has included proposed tariffs on imported chips, which have created ripples in global markets. In parallel, TSMC announced plans for a massive $100 billion investment to build five additional chip plants in the United States. This move aligns with Trump's push to revitalize domestic semiconductor production and reduce reliance on Asian markets. However, Trump has also threatened to withdraw the $52.7 billion US Chips Act subsidies introduced in 2022, under which Intel received grants for its manufacturing expansion.
 

Industry Reaction and Future Outlook

Industry experts believe Tan’s appointment brings stability and strategic clarity to Intel’s future direction. Jack E. Gold, an analyst and president of J Gold Associates, emphasized Tan’s intrinsic understanding of the semiconductor industry, highlighting his expertise in product design and chip manufacturing. According to Gold, this experience will be instrumental in enhancing Intel Foundry’s capabilities and making manufacturing processes more efficient. Meanwhile, Anshel Sag, principal analyst at Moor Insights & Strategy, described Tan as a stabilizing force capable of steering Intel through its ongoing transition. Sag predicted that Tan’s leadership would ensure Intel continues to pursue both foundry services and product development, indicating that the company is unlikely to split its operations. Despite Tan’s impressive credentials, analysts caution that Intel’s transformation will require time, patience, and consistent investment. Restoring Intel’s reputation as a dominant chipmaker will involve significant effort to address manufacturing challenges, improve customer outreach, and establish a stronger foothold in the rapidly evolving AI chip market.
 

Intel’s appointment of Lip-Bu Tan as CEO marks a strategic move to stabilize the company’s struggling chip operations. With a clear focus on combining chip design and manufacturing services, Tan aims to strengthen Intel’s position in the global semiconductor market. While challenges remain, his leadership offers renewed hope for Intel’s ambitious turnaround efforts. As the chip industry continues to evolve, Intel’s journey under Tan’s guidance will be closely watched by both investors and industry leaders alike.