When Pat Gelsinger stepped down as Intel Corporation’s CEO December 2, 2024, plenty of questions swirled about who would follow Gelsinger and lead the company out of its market and chip development doldrums.
The world and Intel got their answers this week as Lip-Bu Tan, a former Intel Board member and the CEO of Cadence Design Systems from 2009 to 2021, was named to the role to reinvigorate it as a leader in chipmaking and design.
The last few years have been rough on Intel as chip delays, lagging innovation in AI, and other problems have dogged its market share and industry leadership, giving up sales and prestige to other chipmakers.
But, that could change under Tan, who has a distinguished track record and experiences that could work in Intel’s favor, according to three industry analysts who shared their impressions of the company’s new leaders with ChannelE2E.
‘Welcome News for Intel’
“This is welcome news for Intel as it appoints an industry veteran that has an intrinsic understanding of the semiconductor industry, both from a product design aspect as well as the needs of enabling chip manufacturing,” said Jack E. Gold, president and principal analyst with J.Gold Associates, LLC. “This is an area that Intel Foundry needs help with in making their tools more user-friendly and accessible for potential customers.”
Gold said he was worried that someone with Tan’s experience and credentials might have been overlooked by Intel’s search committee in favor of a candidate who would not have been as good a fit.
“I feared that the board might recruit a financial [executive] or other non-chip industry CEO, which, in my opinion, would have been a bad move,” said Gold. “Lip-Bu Tan had a great run at Cadence and can leverage his experience and especially his industry connections while also pursuing excellence within Intel. Certainly, he has much to do to turn the ship around, but his appointment is a positive event, and hopefully, the board will stay out of his way as he makes needed changes.”
Gold added that he disagreed with what he called the “firing” of Gelsinger last December, and he noted that even though Tan appears to have what it takes to turn the company around, it would not happen overnight.
“We still need to be realistic,” said Gold. “While Intel has made much progress, the turnaround will take one to two years to fully materialize. Patience is required.”
Gold said that choosing Tan indicates that the board wants to keep Intel whole. “Had they wanted to split up the company, I believe they would have hired a financially oriented person to do that rather than a technologist. So, this is good news for those of us who think Intel's future is brighter if products and manufacturing remain under the same Intel umbrella.”
Another analyst, Karl Freund, the founder and principal analyst of Cambrian AI Research, agreed with the selection of Tan as the new CEO.
“I cannot think of anyone better equipped to lead Intel at this point,” Freund said of Tan’s appointment. “He knows chips. He knows China, and he has the turnaround experience at Cadence needed to rebuild Intel if it is possible.”
One of Tan’s main jobs will be to work to “bring together the big fabless designers and get them to invest in America’s future,” said Freund. “The country is at risk as long as we are totally dependent on Taiwan.”
Shelly Kramer, principal analyst at Kramer&Co., told ChannelE2E that Tan’s arrival at Intel as CEO will be interesting to watch, especially since he chose to depart the Intel board last August because of concerns about the company.
“Wall Street is happy with this move, which is good for shareholders,” said Kramer. However, as for what is ahead for the company, there are no doubt challenging times ahead. When Tan left the Intel board in August of 2024, it was reportedly due to frustration on multiple fronts: A bloated middle management that he viewed as thwarting innovation, as well as a lack of progress in both AI efforts and Intel's foundry business – both which are very valid criticisms.”
Kramer added that it is unlikely that Tan’s views on those issues have changed in the last six months and that it is likely sweeping changes could be coming internally.
“Intel needs sweeping changes if the company is going to stay alive,” said Kramer.
MSPs and the Channel Could Benefit from the Leadership Move
As Tan oversees his expected overhaul of Intel when he begins his new role on March 18, MSPs and channel partners can expect to see changes that will eventually filter down to them, said Gold.
“If Intel is successfully reorganized and increases their market share, MSPs and the channel will benefit,” said Gold. “Having competitive products is an advantage to the entire market as competition is critical to keeping the market healthy.”
Kramer agrees. “Insofar as how this impacts the entire channel, a stronger Intel benefits the MSP community,” she said. “For MSPs and the channel, as well as with every piece of this equation, we are waiting to see how this plays out.”
Freund said that while Tan can certainly make moves that lead to stronger channel and MSP connections with Intel, such a goal will take at least three years to bear fruit. The power of this goal, however, is that “with a revitalized Intel, MSPs and resellers could become more confident in the future of a strong U.S.-based supply chain,” which would be a huge benefit that is worth the wait.
On Intel’s Lagging AI Fortunes
Intel’s slowness in reacting to AI over the last few years has left the chipmaker behind its competitors in this important market, said Gold.
“As for AI, Intel is still behind and will likely be for one to two years at least,” he said. “[Its] Gaudi [AI accelerators] just are not high-end enough,” said Gold. “But, as the market moves from training to inference AI workloads, Intel does have servers that can work in that space and that will help them. The new CEO must set a direction and help speed up the innovation process within the company.”
If Tan can do that, added Gold, “it will be a win for Intel. If it does not happen, then Intel will continue to languish.”
Freund said he sees uncertainty about whether Tan can help right Intel’s floundering ship when it comes to AI.
“That is a harder question,” said Freund. “ Intel has really missed the AI boat again. Intel Xeon Phi chips failed. Intel Nervana [deep learning platform and hardware] failed. Intel Habana [AI chip investment] failed. Now Falcon Shores has been canceled. I am not sure Intel will enter the market in time to be successful. “
So, will Tan be able to fix these problems in the company’s AI strategy shortcomings?
“It is going to be the hardest job in the entire industry,” said Freund. “But he has a shot.”
So, Who is Lip-Bu Tan?
Tan has more than 20 years of semiconductor and software experience, as well as deep relationships across Intel’s ecosystem, according to Intel. As the CEO of Cadence Design Systems, Tan helped reinvent the company and drove a cultural transformation centered on customer-centric innovation. Cadence more than doubled its revenue, expanded operating margins and delivered a stock price appreciation of more than 3,200% during his tenure there, according to Intel. He also served as a member of the Cadence board of directors for 19 years, from 2004 through his service as executive chairman from 2021 to 2023, following his tenure as CEO.
He is also a founding managing partner of Walden Catalyst Ventures and chairman of Walden International. He has also served on public company boards, including Credo Technology Group and Schneider Electric.
Tan earned a Bachelor of Science in physics from Nanyang Technological University in Singapore, a Master of Science in nuclear engineering from the Massachusetts Institute of Technology and an MBA from the University of San Francisco. In 2022, he received the Robert N. Noyce Award, the Semiconductor Industry Association’s highest honor.
In a personal message emailed to all Intel employees on March 12, Tan wrote that he is “humbled and honored to be your next CEO” for a company he said he has long admired for its innovations and world-changing breakthroughs.”
“Of course, as we all know, past achievements do not predict future success, especially in an industry as dynamic as ours,” he wrote. “The pace of change continues to accelerate, and the competition is intense. You understand this better than anyone, and I know it has been a tough few years for all of you and your teams.”
“One of the things you will learn about me,” wrote Tan, “is that I am never deterred by challenges. Throughout my career, they have motivated me to solve hard problems. As I prepare to come on board, I believe we have a truly unique opportunity to remake our company at one of the most pivotal moments in its history.”
It will not be easy, though, he continued in his email.
“But I am joining because I believe with every fiber of my being that we have what it takes to win,” he continued. “Intel plays an essential role in the technology ecosystem, both in the U.S. and around the world. And, together, I am confident we can turn our business around.”
