\u201cThat\u2019s not to say it will be easy. It won\u2019t be,\u201d he said. \u201cBut I am joining because I believe with every fiber of my being that we have what it takes to win. <\/p>\n\n\n\n
Intel plays an essential role in the technology ecosystem, both in the US and around the world.\u201d<\/p>\n\n\n\n
Intel shares jumped more than 10% on the news, after rising 4.6% in regular New York trading on Wednesday. <\/p>\n\n\n\n
The stock was down more than 54% in the past 12 months as the company\u2019s future became increasingly murky, leaving its market value at $89.5 billion (R1.6 trillion).<\/p>\n\n\n\n
Tan\u2019s predecessor, Pat Gelsinger, was pushed out by the board for a perceived failure to rejuvenate Intel\u2019s product lineup. <\/p>\n\n\n\n
One of the most glaring challenges: creating an artificial intelligence accelerator chip that can rival the products of Nvidia. <\/p>\n\n\n\n
That company, once in Intel\u2019s shadow, has seen its revenue and valuation skyrocket over the past two years due to the AI computing boom.<\/p>\n\n\n\n
\u201cThis is good for Intel,\u201d said Stacy Rasgon, an analyst at Bernstein. \u201cIf I had to pick somebody, Lip-Bu would have been at the top of that list.\u201d<\/p>\n\n\n\n
Gelsinger had also set out to turn Intel into a chip foundry \u2014 a contract manufacturer that makes products for outside clients \u2014 but that effort is still in its early stages.<\/p>\n\n\n\n
Tan signaled that he would continue down that path. \u201cWe will work hard to restore Intel\u2019s position as a world-class products company, establish ourselves as a world-class foundry and delight our customers like never before,\u201d he said in the memo, which was posted on the company\u2019s website. <\/p>\n\n\n\n
\u201cThat\u2019s what this moment demands of us as we remake Intel for the future.\u201d<\/p>\n\n\n\n Intel remains one of the world\u2019s biggest chipmakers by revenue, with more than $50 billion (R917 billion) in annual sales. <\/p>\n\n\n\n Its processors are the main component in more than 70% of the world\u2019s personal computers and server machines. And the company\u2019s factories still represent a large chunk of worldwide capacity for advanced manufacturing.<\/p>\n\n\n\n But slip-ups in product development have allowed rivals to gain an edge. Besides Nvidia, Advanced Micro Devices has won market share in PCs and servers \u2014 and is better poised than Intel to make inroads in AI chips. <\/p>\n\n\n\n In the shadow of those challenges, Intel isn\u2019t even in the top 10 chip industry companies worldwide by market value.\u00a0<\/p>\n\n\n\n Tan, a Malaysian-born executive, grew up in Singapore, where he attended Nanyang University and studied physics. <\/p>\n\n\n\n He later went to the Massachusetts Institute of Technology, gaining a masters in nuclear engineering. <\/p>\n\n\n\n He gave up his studies for a doctorate in that field and left for the University of San Francisco, where he got an MBA.<\/p>\n\n\n\n After working in venture investing, he joined the Cadence board in 2004. He became co-CEO in 2008 after incumbent Michael Fister left and then took sole possession of that role in 2009. <\/p>\n\n\n\n Tan ran the company for more than a decade before moving to the position of chairman, which he occupied until 2023.<\/p>\n\n\n\n Cadence, along with rival Synopsys Inc., dominates the market for computer-aided design used to create semiconductors. <\/p>\n\n\n\n Their software and services have become increasingly important with the rise in complexity of the devices. <\/p>\n\n\n\n Engineers use their products to create blueprints for the arrangement of tens of billions of transistors and connecting wires \u2014 the underlying architecture of the tiny components.<\/p>\n\n\n\n Running Intel would have once been the most prestigious position in the industry. <\/p>\n\n\n\n In its heyday, Intel\u2019s profitability was unusually high for a manufacturing company. Its gross margin \u2014 the percentage of sales remaining after deducting the cost of production \u2014 was north of 60%. <\/p>\n\n\n\n The benchmark is currently languishing at about half that level.\u00a0<\/p>\n\n\n\n When Gelsinger took the helm in 2021, he was seen as a potential savior of the company. <\/p>\n\n\n\n But Wall Street soured on his turnaround plan after a string of disappointing quarterly results \u2014 including\u00a0an August 2024 report\u00a0that analysts described as the worst in its history.\u00a0<\/p>\n\n\n\n In 2024, Intel was by far the lowest performer on the Philadelphia Stock Exchange Semiconductor Index, declining 60%. As the company\u2019s valuation plummeted back to 1990s levels, the once-unthinkable idea of an Intel takeover has become more plausible. <\/p>\n\n\n\n Intel\u2019s new leader will have to navigate approaches from suitors and decide whether to stick with Gelsinger\u2019s stance that a breakup is unnecessary. <\/p>\n\n\n\n Some on Wall Street have suggested splitting up the company\u2019s chip-design and manufacturing units, which are already separated operationally.<\/p>\n\n\n\n Qualcomm, Broadcom and Arm Holdings have explored the idea of acquiring all or part of Intel, Bloomberg News has reported. <\/p>\n\n\n\n If formal approaches are made, Intel\u2019s board will be under pressure to consider scenarios that Gelsinger may have rejected.<\/p>\n\n\n\n Separately, the Trump administration approached rival Taiwan Semiconductor Manufacturing and asked it to consider taking a stake in a spinoff of Intel\u2019s factories. <\/p>\n\n\n\n Under that proposal, which Bloomberg News reported on last month, TSMC would run the plants and reconfigure them to use its technology \u2014 something that might make them more attractive to outside customers. <\/p>\n\n\n\n Intel\u2019s plants currently focus primarily on its own designs.<\/p>\n\n\n\n The plan also included trying to get TSMC\u2019s biggest clients \u2014 a list that includes Qualcomm, AMD and Apple Inc. \u2014 to invest in the Intel spinoff. <\/p>\n\n\n\n But that report was followed a week later by TSMC\u2019s announcement at the White House that it would increase investments in its own complex in Arizona. That suggests it would prefer not to get involved in outside projects.<\/p>\n\n\n\n Santa Clara, California-based Intel is the biggest recipient of grants from the US government under the Chips and Science Act, a Biden administration push to reinvigorate domestic semiconductor production.<\/p>\n\n\n\n The Chips Act money, totaling nearly $8 billion (R147 billion), is contingent on Intel completing milestones, including the building and equipping of new factories around the US. <\/p>\n\n\n\n Intel has already delayed some of its building plans, including for a complex in Ohio. President Donald Trump also has spoken out against the program.<\/p>\n\n\n\n Intel Chairman Frank Yeary said in a separate statement that Tan could leverage his experience reinventing Cadence. <\/p>\n\n\n\n Tan \u201cdrove a cultural transformation centred on customer-centric innovation,\u201d he said.<\/p>\n\n\n\n \u201cDuring his time as CEO, Cadence more than doubled its revenue, expanded operating margins and delivered a stock price appreciation of more than 3,200%,\u201d Yeary said. <\/p>\n\n\n\n \u201cHe also knows Intel well, both as a partner when he ran Cadence and having recently served on our board.\u201d<\/p>\n\n\n\n If Tan can\u2019t orchestrate a similar turnaround at Intel, said Bernstein\u2019s Rasgon, \u201cit was probably unfixable.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":" Intel named former board member and semiconductor veteran Lip-Bu Tan as its next chief executive officer.<\/p>\n","protected":false},"author":341034,"featured_media":586726,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_sma_x_autopost_status":"idle","_sma_x_autopost_error":"","_sma_x_post_id":"","_sma_facebook_post_id":"","_sma_instagram_post_id":"","_sma_threads_post_id":"","_sma_x_attempts":0,"footnotes":""},"categories":[19],"tags":[131,99128,71088],"class_list":["post-586723","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business","tag-intel","tag-lip-bu-tan","tag-pat-gelsinger"],"_links":{"self":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/posts\/586723"}],"collection":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/users\/341034"}],"replies":[{"embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/comments?post=586723"}],"version-history":[{"count":3,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/posts\/586723\/revisions"}],"predecessor-version":[{"id":586731,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/posts\/586723\/revisions\/586731"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/media\/586726"}],"wp:attachment":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/media?parent=586723"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/categories?post=586723"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/tags?post=586723"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}![\"\"](\"https:\/\/mybroadband.co.za\/news\/wp-content\/uploads\/2024\/09\/pat-gelsinger.jpg\")