Semiconductor giant Intel hired semiconductor veteran Lip-Bu Tan to be its new CEO. This news comes three months after Pat Gelsinger retired and stepped down from the company’s board, with Intel CFO David Zinsner and executive vice president of client relations Michelle Johnston Holthaus stepping in as co-CEOs.
Tan, who was most recently the CEO of Cadence Design Systems, is joining Intel — and rejoining the board — at an interesting time in the Silicon Valley company’s history. Intel has seen its fair share of ups and downs in the past few years — to put it mildly.
When Gelsinger took the helm in February 2021, Intel was already struggling and was falling far behind its peers in the semiconductor race. At the time, the company was likely still reeling from missing out on the smartphone revolution in addition to missteps when it came to chip fabrication.
It was also an interesting time for the semiconductor industry at large. The sector had seen a lot of recent consolidation in late 2020, including AMD acquiring Xilink for $35 billion and Analog buying Maxim for $21 billion, among others.
So how was Gelsinger’s most recent tenure at Intel? Let’s take a look.
Gelsinger got right to work when he started. He announced a modernization plan for the company, dubbed IDM, or integrated device manufacturing. The first part of the goal was a $20 billion investment to build two new chip manufacturing facilities in Arizona, with plans to boost chip production in the U.S. and beyond.
In 2022, the company announced the second part of this IDM plan, which involved a three-pronged approach to chip manufacturing: Intel’s fabs, third-party global manufacturers, and building out the company’s foundry services. As part of this plan, the company announced it would acquire Tower Semiconductor for $5.4 billion to help build out Intel’s custom foundry services.
That deal fell through, however, after facing regulatory hurdles. It was canceled in the summer of 2023. At the time, TechCrunch reported that the merger not going through would have a serious impact on the company’s modernization plans. In September 2024, Intel took steps to transition its chip foundry division, Intel Foundry, to an independent subsidiary.
The time leading up to Gelsinger’s retirement was particularly tumultuous for Intel. The company’s stock price plummeted about 50% from the beginning of 2024 to Gelsinger’s departure in December. Intel announced plans to lay off 15% of its workforce, around 15,000 people, in August after dismal second-quarter results. At that time, Gelsinger said the company had struggled to capitalize on the AI boom in the same way its rivals had, and that despite falling behind, Intel had overgrown headcount.
In the time since Gelsinger’s departure, the company has delayed the opening of its Ohio chip factory — again — and decided not to bring its Falcon Shores AI chips to market.
But as Tan takes the lead, things may be starting to head in the right direction. Intel finalized a deal with the U.S. Department of Commerce to receive a $7.865 billion grant for domestic semiconductor manufacturing through the U.S. Chips and Science Act; Intel has already received $2.2 billion of that grant money, according to its fourth-quarter earnings call. The company was also able to notch a win when it comes to the popularity of its Arc B580 graphics card, which sold out after positive early reviews.