Intel's new CEO to reclaim industry crown back from rival Nvidia

Intel has appointed former board member Tan Lip Bu as its new CEO, effective March 18, as the company grapples with challenges in capitalizing on the AI chip boom that has propelled rival Nvidia to dominance.

The appointment of chip industry veteran Tan Lip Bu, effective from 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 the progress of change was not fast enough. An article by the The Independent Singapore has provided a closer look into the internal struggles Intel has been facing in recent times, highlighting that Gelsinger's departure came well before the completion of his four-year road map to reclaim Intel’s edge over Taiwan Semiconductor Manufacturing Company (TSMC), which produces chips for competitors like Nvidia.

A Malaysian-born industry veteran, Tan grew up in Singapore and holds degrees in physics, nuclear engineering, and business administration. He had long been considered a strong candidate for CEO due to his deep expertise in semiconductors and his success as a technology investor. Intel’s board first approached him in December to discuss taking on the role.

“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 wrote in a letter to employees on March 13.

From 2009 to 2021, Tan served as CEO of Cadence Design Systems, a key Intel supplier specializing in chip-design software. Under his leadership, Cadence saw significant revenue growth and stock appreciation. He previously left Intel’s board due to frustrations over the company’s workforce size, contract manufacturing strategy, and bureaucratic culture.

Following the announcement, Intel’s stock surged 12% in extended trading on March 13. Analysts welcomed Tan’s leadership, though they cautioned that Intel’s transformation would take years. The company’s stock had already fallen 60% in 2024.

The American computer titan is currently undergoing a major transition as it seeks to recover from one of its most difficult periods. While it has struggled to profit from AI chip investments that have fueled Nvidia’s rise, Intel is also investing heavily in contract manufacturing. This shift has raised investor concerns about cash flow pressures.

Recent media reports indicate that rivals like Broadcom have evaluated Intel’s chip design and marketing business, while TSMC has reportedly explored acquiring or managing some of Intel’s chip plants. Reuters reported on March 12 that TSMC had discussed forming a joint venture with Intel’s biggest potential manufacturing customers after the US government encouraged TSMC to assist in Intel’s turnaround.

Tan is expected to leverage his deep understanding of semiconductor design and manufacturing to improve Intel Foundry’s accessibility for potential customers. Analysts believe his messaging signals a desire to keep Intel intact, though a full recovery will require long-term investor patience.

His appointment aligns with US President Donald Trump’s push for increased US manufacturing, as the former president has threatened tariffs on imports that have unsettled global markets. While Trump has not directly commented on Intel, he has criticized Asia, including Taiwan, for diminishing America’s dominance in semiconductor production.

By Nazrin Sadigova