zeeshan khan
Lip-Bu Tan, a veteran in the semiconductor industry, was appointed as the next CEO of the semiconductor powerhouse Intel. Intel CFO David Zinsner and corporate vice chairman of customer service Michelle Johnston Holthaus have taken over as co-CEOs following Pat Gelsinger’s retirement and resignation from the business’s board a month ago.
Tan has joined Intel and returned to the board of directors at an intriguing moment in the Silicon Valley firm’s history. Tan was formerly the CEO of Cadence Design Systems. To put it lightly, Intel has had a number of turbulent periods over the last few years.
In February 2021, when Gelsinger came over, Intel had been experiencing trouble and lagging well behind its competitors in the semiconductor industry. In addition to errors in chip manufacture at the time, the corporation was probably still in shock over losing its place in the popularity of smartphones.
For the semiconductor sector as a whole, it was also an intriguing period. Late in 2020, there was a lot of restructuring in the industry, with Analog purchasing Maxim for $21 billion and AMD purchasing Xilink for $35 billion, among other deals.
What was the experience of Gelsinger’s current job at Intel like? Let’s examine.
Gelsinger started working immediately. He unveiled the company’s modernization strategy, which he called integrated device production, or IDM. With ambitions to increase chip production both in the United States and abroad, the first element of the project involved investing $20 billion to construct two new semiconductor manufacturing plants in Arizona.
The second phase of this IDM strategy, which comprised a three-stage approach to chip manufacturing using Intel’s fabs, third-party worldwide manufacturers, and expanding the business’s foundry services was announced by the company in 2022. In order to expand Intel’s custom foundry capabilities, the firm stated that it will pay $5.4 billion to purchase Tower Semiconductor.
However, after encountering regulatory obstacles, that acquisition fell apart. During the summer of 2023, it was cancelled. TechCrunch stated at the time that the company’s attempts at modernization would be significantly impacted if the deal failed. Intel started the process of turning its chip foundry business, Intel the Foundry, as a stand-alone entity in September 2024.
For Intel, the period before Gelsinger’s retirement was very turbulent. The stock price of the corporation fell by over 50% from the start of 2024 and Gelsinger’s resignation in December. Following poor second-quarter performance, Intel revealed intentions to lay off 15% of its staff, approximately 15,000 people, in August. Gelsinger claimed at the time that Intel had overrun its workforce while lagging behind its competitors and that the corporation had not been able to take advantage of the Artificial Intelligence growth in the same way.
Since Gelsinger’s departure, the business has chosen not to launch its Falcon Shores AI processors and has once again postponed the inauguration of its Ohio chip facility.
However, as Tan assumes the initiative, things could be beginning to move in the correct perspective. During its fourth-quarter conference call, Intel was awarded $2.2 billion of the $7.865 billion grant money for domestic semiconductor manufacturing under the U.S. Chips and Science Act, which it completed with the help of the Department of Commerce. The business also achieved success with their Arc B580 graphics card, which sold out following favorable first evaluations.
