Semiconductor big Intel employed 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 built-in gadget manufacturing. The primary a part of the objective was a $20 billion funding to construct two new chip manufacturing services 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 companies. As a part of this plan, the corporate introduced it will purchase Tower Semiconductor for $5.4 billion to assist construct out Intel’s customized foundry companies.
That deal fell via, nonetheless, after going through regulatory hurdles. It was canceled in the summertime of 2023. On the time, TechCrunch reported that the merger not going via would have a severe affect 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 significantly tumultuous for Intel. The corporate’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 the moment, 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.
Within the time since Gelsinger’s departure, the corporate has delayed the opening of its Ohio chip manufacturing facility — once more — and determined to not deliver its Falcon Shores AI chips to market.
However as Tan takes the lead, issues could also be beginning to head in the fitting path. Intel finalized a cope with the U.S. Division 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 corporate was additionally capable of notch a win in terms of the recognition of its Arc B580 graphics card, which bought out after positive early reviews.