Semiconductor large Intel employed semiconductor veteran Lip-Bu Tan to be its new CEO. This information comes three months after Pat Gelsinger retired and stepped down from the corporate’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 lately the CEO of Cadence Design Systems, is becoming a member of Intel — and rejoining the board — at an attention-grabbing time within the Silicon Valley firm’s historical past. Intel has seen its justifiable share of ups and downs up to now few years — to place it mildly.
When Gelsinger took the helm in February 2021, Intel was already struggling and was falling far behind its friends within the semiconductor race. At the time, the corporate was doubtless nonetheless reeling from lacking out on the smartphone revolution along with missteps when it got here to chip fabrication.
It was additionally an attention-grabbing time for the semiconductor business at giant. The sector had seen lots of current consolidation in late 2020, together with AMD buying Xilink for $35 billion and Analog shopping for Maxim for $21 billion, amongst others.
So how was Gelsinger’s most up-to-date tenure at Intel? Let’s have a look.
Gelsinger obtained proper to work when he began. He introduced a modernization plan for the corporate, dubbed IDM, or built-in gadget manufacturing. The first a part of the purpose was a $20 billion funding to construct two new chip manufacturing amenities in Arizona, with plans to spice up chip manufacturing within the U.S. and past.
In 2022, the corporate introduced the second a part of this IDM plan, which concerned a three-pronged method to chip manufacturing: Intel’s fabs, third-party international producers, and constructing out the corporate’s foundry providers. As a part of this plan, the corporate introduced it could purchase Tower Semiconductor for $5.4 billion to assist construct out Intel’s customized foundry providers.
That deal fell via, nevertheless, after dealing with regulatory hurdles. It was canceled in the summertime of 2023. At the time, TechCrunch reported that the merger not going via would have a critical influence on the corporate’s modernization plans. In September 2024, Intel took steps to transition its chip foundry division, Intel Foundry, to an impartial subsidiary.
The time main as much as Gelsinger’s retirement was notably tumultuous for Intel. The firm’s inventory value plummeted about 50% from the start of 2024 to Gelsinger’s departure in December. Intel introduced plans to put off 15% of its workforce, round 15,000 folks, in August after dismal second quarter outcomes. At that point, Gelsinger mentioned the corporate had struggled to capitalize on the AI growth in the identical means its rivals had, and that regardless of falling behind, Intel had overgrown headcount.
In the time since Gelsinger’s departure, the corporate has delayed the opening of its Ohio chip manufacturing unit — once more — and determined to not carry its Falcon Shores AI chips to market.
But as Tan takes the lead, issues could also be beginning to head in the precise course. Intel finalized a take care of the U.S. Department of Commerce to obtain a $7.865 billion grant for home semiconductor manufacturing via the U.S. Chips and Science Act; Intel has already acquired $2.2 billion of that grant cash, in response to its fourth-quarter earnings name. The firm was additionally in a position to notch a win relating to the recognition of its Arc B580 graphics card, which bought out after optimistic early critiques.
