Intel at a Crossroads: Can Lip-Bu Tan Revive the Chip Giant?
C-Suite Transitions
For decades, “Intel Inside” was synonymous with computing dominance, shaping the backbone of PCs, data centers, and enterprise systems worldwide. However, in recent years, the semiconductor giant has faced intense competition from AMD, and NVIDIA, struggling with manufacturing setbacks, and working to regain its position as a leader in semiconductor innovation.
As the industry shifts toward AI-driven computing and cutting-edge semiconductor processes, Intel is at a crossroads—needing both strategic reinvention and operational excellence to reclaim its leadership.
Key Insights
Lip-Bu Tan named Intel’s new CEO – a seasoned semiconductor veteran with deep industry ties.
Tan previously resigned from Intel’s board due to strategic disagreements.
Lip-Bu Tan is bullish on Intel’s foundry business, viewing it as a vital piece of Intel’s future, with plans to refine its operations
Key focus areas: Foundry turnaround, AI chip production, and streamlining operations.
Intel Corp (INTC): $24.16
Market Cap: $104.61B
EV: $145.79B
Intel’s Business Model
Intel operates through two core segments:
1. Intel Products
Client Computing Group (CCG): Develops processors and platforms for consumer and commercial PCs.
Data Center and AI (DCAI): Focuses on high-performance computing, cloud data centers, and AI-driven workloads.
Networking and Edge (NEX): Provides networking, edge computing, and 5G infrastructure solutions.
2. Intel Foundry encompasses the company’s semiconductor manufacturing operations, including Foundry Technology Development, Foundry Manufacturing & Supply Chain, and Foundry Services. This segment operates as an internal and external contract chip manufacturer, competing with firms like TSMC and Samsung.
Standalone and Non-Core Businesses
Altera: Intel’s programmable solutions unit, spun off as an independent subsidiary in 2024.
Mobileye (MBLY): A leader in autonomous driving and ADAS technology. Intel took it public in 2022 but retains a majority stake.
The Leadership Shake-Up
In December 2024, Intel (INTC) CEO Pat Gelsinger’s tenure came to an abrupt end following a contentious boardroom showdown over Intel’s failure to counter Nvidia’s dominance and growing skepticism about his turnaround strategy.
Gelsinger, who had spent 30 years at Intel in various roles, including as Chief Technology Officer, was instrumental in the development of technologies like USB, Wi-Fi, and the 80486 processor before leaving in 2009. He later served as CEO of VMware from 2012 to 2021 before returning to Intel as CEO in February 2021.
Effective December 1, 2024, Gelsinger stepped down, with CFO David Zinsner and Intel Products CEO Michelle (MJ) Johnston Holthaus stepping in as interim co-CEOs. Board Chair Frank Yeary also took on an expanded role as interim executive chair.
Gelsinger returned to Intel with an ambitious plan to reclaim semiconductor leadership. His strategy included aggressive foundry expansion to compete with Samsung and TSMC, securing billions in CHIPS Act funding to support manufacturing growth. However, these efforts strained Intel’s finances, leading to rising debt and declining free cash flow.
At the same time, the AI boom propelled Nvidia to new heights, while Intel struggled to keep pace. By 2024, Intel’s market cap had fallen below $100 billion, and its stock price had plunged 52%. A dismal earnings report in August triggered Intel’s worst stock selloff in 50 years, forcing the company to announce a $10 billion cost-cutting plan—including layoffs affecting over 15% of its workforce.
With investor confidence at a breaking point, Intel’s board moved quickly to chart a new course.
Who is Lip-Bu Tan?
Last week, Intel’s board appointed Lip-Bu Tan as CEO, effective March 18, 2025, succeeding interim co-CEOs David Zinsner and Michelle (MJ) Johnston Holthaus. The announcement was met with a strong market reaction, with Intel’s stock surging nearly 20%.
Zinsner will continue as CFO, while Holthaus remains CEO of Intel Products. Frank D. Yeary, who took on an expanded role as interim executive chair, will return to his position as independent chair.
Tan brings decades of experience in semiconductors, having served on Intel’s board from August 2022 to August 2024. His resignation came after differences with CEO Pat Gelsinger and other directors over Intel’s bloated workforce, risk-averse culture, and lagging artificial intelligence strategy. His return is widely seen as an effort to restore semiconductor leadership at Intel, an area where the company has struggled to keep pace with TSMC, Samsung, and Nvidia.
With 15 years at Cadence Systems, including 13 as CEO, he brings extensive semiconductor expertise and deep industry connections. He was the longest-sitting CEO of this company, ending in 2021 when the company had a market cap of $51 billion. He started as CEO in 2009 when the company was valued at $2 billion.
To drive Intel’s turnaround, Lip-Bu Tan may leverage the same underdog strategies that helped him transform smaller firms into industry leaders. As an investor, he backed Nuvia, which was later acquired by Qualcomm for $1.4 billion in 2021. He remains actively involved in promising startups, including AI photonics company Celestial AI, a potential competitor or acquisition target for Intel, notably backed by AMD. During his tenure as CEO of Cadence Design Systems (2009–2021), he led a remarkable 3,200% stock surge and played a crucial role in securing Apple as a key customer—a pivotal shift as Apple moved away from Intel chips.
He has also served as a board member for several semiconductor companies, which gives him broad insight into every aspect of the industry. His board experience also includes SoftBank, which took ARM public in 2023, and Hewlett Packard Enterprise. He founded Walden International and Walden Catalyst Ventures, and served as Chairman at Nuvia and Innovium (bought by Marvell).
In his first memo to Intel employees, Tan laid out his vision for the company’s resurgence, acknowledging the challenges ahead but expressing unwavering confidence in Intel’s ability to reclaim its leadership.
“Not to say it will be easy. It won’t be. But I am joining because I believe with every fiber of my being that we have what it takes to win.”
Lip-Bu Tan will receive a $1 million salary, a $2 million annual bonus, $66 million in stock options and grants vesting over five years, and a $25 million new hire option grant. Additionally, Tan has agreed to invest $25 million in Intel stock to qualify for his grants and bonuses.
Echoes of GE: Can Intel Pull Off a Similar Turnaround?
Turnaround situations have a reputation for delivering spectacular returns, if and when the company can actually turn things around. Once a company has lost its way, it is very difficult to regain market share or become profitable even if new management is at the helm. Under Culp’s leadership since 2018, GE underwent a radical transformation aimed at stabilizing a debt-laden, inefficient conglomerate.
His strategy focused on deleveraging, operational efficiency, and breaking up GE into three independent, publicly traded companies: GE HealthCare(GEHC), GE Vernova (GEV), and GE Aerospace. By leveraging lean manufacturing principles from his time at Danaher, Culp successfully repositioned GE, turning what was once a struggling giant into a set of focused businesses with investment-grade balance sheets.
Intel, on the other hand, is pursuing a different kind of restructuring, driven by competitive pressures and financial challenges. The company has spun off or restructured multiple divisions, including the recent announcement to separate Intel Capital into an independent venture capital firm. Intel also spun off Mobileye, its autonomous vehicle technology unit.
Additionally, Intel might separate its foundry business, potentially in partnership with TSMC, to increase its focus on its core semiconductor manufacturing operations. While GE’s transformation has largely been seen as successful, Intel’s restructuring is still in progress, with uncertainty over how its spinoffs and strategic realignments will ultimately impact its market position.
However, Intel’s turnaround will likely take several years due to the sheer scale of its operations, unlike GE’s restructuring, which was largely focused on breaking up divisions. The tech industry presents unique challenges—Yahoo, for instance, cycled through multiple CEOs in a decade without successfully reviving its core business. In contrast, AMD’s turnaround under Lisa Su demonstrates that strategic leadership and execution can restore competitiveness, even in a rapidly evolving sector. For Intel, success will depend on managing its financial constraints while delivering on innovation and executing its long-term strategy.
Check out the full article on InsideArbitrage here:
https://www.insidearbitrage.com/2025/03/intel-at-a-crossroads-can-lip-bu-tan-revive-the-chip-giant-c-suite-transitions/