Intel appoints chip industry veteran Lip-Bu Tan as CEO

By Max A. Cherney, Stephen Nellis

(Reuters) -Intel on Wednesday named former board member and chip industry veteran Lip-Bu Tan as its CEO and signaled the struggling but storied chipmaker was unlikely to split up its chip-design and manufacturing operations.

The appointment, effective March 18, comes three months after Intel ousted CEO and company veteran Pat Gelsinger, whose costly and ambitious plan to turn the company around was faltering and sapping investor confidence.

Tan, a former Intel board member, had been seen as a CEO contender thanks to his deep experience in the chip industry as well as a longtime technology investor in promising startups. He was approached by Intel's board in December to gauge his interest in taking up the job, Reuters had reported.

"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," Tan said in a letter to Intel employees on Wednesday.

Intel shares surged 12% in extended trading on Wednesday, and analysts welcomed the move that they said was likely to bring some stability to the chipmaker. The company's stock had declined 60% in 2024.

Intel is undergoing a historic transition as it attempts to emerge from one of its bleakest periods.

While struggling to cash in on a boom in investment in advanced AI chips that has fired up the fortunes of market leader Nvidia and other chipmakers, the company is spending heavily to become a contract manufacturer of chips for other companies, leading some investors to worry about pressure on its cash flows.

Media reports in the past two months said chip rivals including Broadcom were evaluating Intel's chip design and marketing business, while TSMC has separately studied controlling some or all of Intel's chip plants, potentially as part of an investor consortium or other structure.

Reuters reported on Tuesday that TSMC had approached some of Intel's biggest potential manufacturing customers about forming a joint venture to operate Intel's factories, after U.S. President Donald Trump's administration requested TSMC to help turn around the troubled chipmaker.

"This (Tan's appointment) is welcome news," said Jack E. Gold, analyst and president of J. Gold Associates, which covers the chip industry.

Tan has an "intrinsic understanding of the semiconductor industry, both from a product design aspect as well as the needs of enabling chip manufacturing - an area that Intel Foundry needs help in making their tools more user-friendly and accessible for potential customers," he said.