As CEO, Intel’s decision to hire a lesser-known semiconductor deal maker has supported investors who want outsiders to turn around troubled chip makers.
The US Group announced Wednesday that Lip Butane, who joined Inter’s board in 2022 but resigned last year, has been selected to replace Pat Gelsinger.
Wall Street welcomed the move this week by boosting Intel’s shares nearly 15%. However, the decision came after a deliberative process, with Frank Inai saying that the board met “many powerful leaders” before settling down to a Malaysian-born Mandarin-speaking MIT-educated executive.
“If he was the first choice on the board, they would have named him in December (when Gelsinger suddenly resigned).” “After he left the board, my assumption is that they looked elsewhere for the CEO and returned to Rip Bu Tang as they ran out of their options.”
The majority of Tan’s complaints were “he wasn’t part of Intel,” said Patrick Moorhead, a chip consultant at Moor Insights & Strategy. “This is what the market wants, they want outsiders.
Inter declined to comment.
Tan’s difficult intray includes clarifying the plans for the iconic American company, the world’s most valuable chipmaker just five years ago, but its stocks have fallen by more than 50%, with the company’s market capitalization of $100 billion.
Intel has lost its position as a PC chip rival, missed the opportunity for AI data centers snatched by Nvidia and AMD, and is under pressure to sell its lossy manufacturing industry.
Tan also needs to develop a relationship with President Donald Trump, whose administration has a floating idea of ​​its own about how to reverse Inter’s fortune, such as leaning against Taiwan’s TSMC to support US rivals.
According to people familiar with the situation, Trump administration officials are pushing TSMC to help run manufacturing plants and invest in stocks for Intel.
Tan acknowledged the challenges in writing to employees this week. “I subscribe to simple philosophy,” he wrote. “Be humble. Work hard. Make your customers happy. When you are surrounded by these three core beliefs, good things happen.”
“In many ways, we are the founders of the ‘New Intel’,” Tan said.
Over the course of 57 years of history, Intel’s CEO was picked directly from its top ranks or spent a significant portion of his career there.
In contrast, Tan is an investor who founded his venture capital group, Walden International, in 1987, and he continues to serve as chairman. Walden is known for his investment in dozens of semiconductor companies and was an early investor in China’s state chip maker Smic.
Walden’s ties to China said it helped China’s military ambitions last year when a US Congressional Committee appointed it as one of five venture capital companies that invested billions of dollars in AI and chip groups. Walden did not respond to requests for comment.
Tan also works for boards for several semiconductor groups other than SoftBank, HPE, and Intel. He is currently the director of the Schneider Electric and Credo Technology Group.
His one previous role was with Cadence Design Systems, a chip design software company that forms a key link in the global semiconductor industry. Tan served as chief executive from 2009 to 2021, during which the company’s revenues have more than doubled.
Tan has no indication of where he stands as to whether to sell, maintain or shrink, an Intel foundry. Of the many questions he faces from shareholders, it is the most pressing one.
After spending the first 30 years of his career with Intel, Gelsinger has promised not only to create Intel’s own chips, but also to build them for Nvidia, Apple and others, and spend billions of dollars in the short term to keep up with TSMC.
However, Gelsinger had to convince its customers that they could compete in the chip design market, trusting Intel to build chips. Gelsinger’s reliability has increased doubts as the company’s strategy of investing heavily in new Foundries increased its doubts.
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The question is whether modest tanning can plot a clear and ruthless strategy for Intel. Bernstein analysts forecast this week that they have cut further business under his watch after announcing a $1 billion cost-cutting effort in August, including 15,000 layoffs.
Those who know Tan described him as quiet and not low, but capable of levity. A former Cadence colleague explained that Tan easily dresses to the despicable ME movie “minions” at work parties and performs as “ringers” on the inter-company basketball team.
The acquaintance also notes his deep religious nature, what he has in common with his predecessor, Gelsinger. Mark LaBorton, a former senior pastor at the Presbyterian Church of Tan in Berkeley, has known the Tan family for many years.
One venture capital investor who knows him said, “Tan is very smart, experienced and well connected in Asia in the semiconductor field.”
“He has an incredible reputation in the semi-finals,” they added. “It’s very difficult to turn Inter around, but if anyone can do that, it’s going to be him.”
Additional Reports by George Hammond of San Francisco
