Intel names new CEO amid turnaround efforts

Intel, a fallen Silicon Valley icon trying to restore its reputation as America's most prominent semiconductor company, has named Lip-Bu Tan, an experienced business and technology leader, as its new CEO.

Tan, 65, will be responsible for reviving the fortunes of a chipmaking company that has fallen from grace. Once one of the best-known names in technology, the semiconductor giant has been hobbled in recent years by its struggles to innovate and failure to claim a share of the market for chips used in smartphones and artificial intelligence.

Intel's problems became so pronounced that last year, it ousted its CEO, Patrick Gelsinger, and cut 15,000 jobs. The company's share price has fallen 54 per cent over the past year.

The company's woes have alarmed the US government, where lawmakers have been trying to rebuild the chips industry after the pandemic created a global shortage that forced US auto factories to shutter. Under the CHIPS Act, a bipartisan law, Intel was awarded $8.5 billion in federal funding to build plants in Arizona, Ohio and New Mexico. But its business challenges have raised questions about its ability to complete those projects.

This year, the Trump administration began meeting with Intel's leadership about how to restore its business, one of the country's last in advanced semiconductor manufacturing. One proposal was to have a rival, Taiwan Semiconductor Manufacturing Co., the world's largest chipmaker, assume operations for Intel's ailing manufacturing business. Frank Yeary, Intel's chair, was open to that idea, The New York Times has reported.

Now it will be up to Tan to direct Intel's future. The company is one of the last in the world that still both designs and manufactures semiconductors. Its former board members and others in the industry have been calling for the company to split those businesses apart.

Investors reacted positively to Tan's appointment, causing Intel's stock price to jump more than 11 per cent in aftermarket trading.

Tan has a long history as an investor in Silicon Valley, one of few who kept putting money into semiconductor and tech hardware startups when most other venture capitalists chose less risky investments in software and internet services. While running the venture capital firm Walden International, he served a lengthy stint as CEO of Cadence Design Systems, one of the two dominant makers of software used in designing chips.

He is widely credited with turning around that company, which now boasts a market value of more than $65 billion.

Tan retains an active role in many small and midsize tech hardware companies. He was named executive chair last May of SambaNova Systems, a company competing with Nvidia, the world's dominant developer of AI chips. He is also chair of Credo Technology Group Holding, a maker of communications chips.

In recent years, Tan has faced criticism for his investments in Chinese AI and semiconductor companies. A congressional committee focusing on China wrote him a letter in 2023 requesting information about Walden International's investments in companies that are on a government blacklist because they have been labeled a risk to national security.