Who is Lip-Bu Tan, Intel’s new CEO tasked with struggling chipmaker’s turnaround?

While Tan is set to officially take over the reins from March 18, news of his appointment cheered investors with Intel’s shares jumping more than 10 per cent in after hours trading on Wednesday.

Under the new leadership, Intel will look to right the ship after a tumultuous four year-run under Gelsinger. The Silicon Valley company has been in a battle of survival after failing to cash in on the booming AI market and falling far behind its peers in the semiconductor race.

In recent years, Intel has come under pressure from investors to cut its losses and spin off businesses due to declining sales. However, Tan’s remarks suggest that the once-dominant chip company is still committed to its fabrication operations.

“In areas where we have momentum, we need to double down and extend our advantage. In areas where we are behind the competition, we need to take calculated risks to disrupt and leapfrog. And in areas where our progress has been slower than expected, we need to find ways to pick up the pace,” Tan said in a statement.

So, what is Tan’s background and career history? Will it help him turn things around for Intel? What is likely to be on his agenda as CEO? Take a look.

Nuclear engineer-turned-angel investor

Lip-Bu Tan was born in Malaysia and grew up in Singapore. He holds a Bachelor of Science degree from the Nanyang University of Singapore and a Master of Science in Nuclear Engineering from the Massachusetts Institute of Technology (MIT) in the United States of America.

After graduating from MIT in the 1970s, Tan continued his doctoral studies in nuclear engineering at the same university. However, in 1979, a nuclear energy plant at Three Mile Island in Pennsylvania, US, malfunctioned and led to partial damage of the reactor core. The partial reactor meltdown was the most serious nuclear accident in US history and had a chilling effect on the country’s commercial nuclear energy industry.

As a result, Tan dropped out of his PhD programme and pursued an MBA from the San Francisco University, according to a 2004 report by BusinessWeek.

In 1987, Tan founded a venture capital firm called Walden International with a focus on backing tech startups in Asia. Walden is also the name of the pond made famous by 19th-century American essayist Henry David Thoreau, who was known as a nonconformist.

Like Thoreau, Tan’s goal was to reportedly be “contrarian, rather than just following the trend.” Walden International invested in tech brands such as Creative Technology, the Singapore-based producer of sound cards used in PCs; Sina Corp, a Chinese-language web portal; and Shanghai-based chipmaker Semiconductor Manufacturing International Corp, as per the report.

‘Most connected person’

Tan went on to serve as vice-president of Chappell & Co, and held management positions at EDS Nuclear and ECHO Energy, according to a 2020 press release by Schneider Electric.

In 2009, he was appointed as CEO of Cadence Design Systems, a company that makes software tools for major chip designers, including Intel. But he was not entirely an outsider to the semiconductor industry.

During his VC days, Tan reportedly invested mostly in chip-making companies and had made deep connections within the business. He has also advised the Chinese and Taiwanese governments on semiconductors, according to a 2013 report by Economic Times.

Cadence Design Systems’ revenue and stock reportedly surged under his decades-long term as CEO.

Tan has also been appointed as a member on the boards of several notable tech companies including Schneider Electric, Hewlett Packard Enterprise, Credo Technology Group, Aquantia, and more.

In 2017, Tan was named as the most connected person in the tech industry by Market Watch. He received the Noyce Award in 2022, the highest honour bestowed by the Semiconductor Industry Association and named after Intel co-founder Robert N Noyce.

A turnaround awaits

Tan is set to be Intel’s fourth permanent CEO over the last seven years. However, he is not exactly an outsider to the company as Tan has previously served on Intel’s board of directors.

He exited the board last year over disagreements with Pat Gelsinger on how to turn around the company, according to a report by Reuters. Though, his statement cited “a personal decision based on a need to reprioritise various commitments” as reason for his departure. Tan will be rejoining the board, the company clarified on Wednesday.

It would be an understatement to say that the 65-year-old new CEO has his work cut out for him.

Intel has been trounced by Nvidia in the AI market as the latter’s GPUs have emerged as the top choice for developers in recent years.

While Intel has attempted to transform its business model by manufacturing chips for other companies, besides its own, the company’s overall products revenue continues to decline. Earlier this year, Intel pulled the plug on its next-gen Falcon Shores GPUs and delayed the opening of a new, $20 billion dollar chip factory in Ohio, US.

Tan reportedly possesses a diverse skill-set that covers the design and manufacturing aspects of fabricating AI chips. As CEO, one of Tan’s biggest challenges is deciding Intel’s identity as a chip design company or a chip manufacturing company?A PC and server chip company or an AI chip company?

He will also likely have to navigate the threat of tariffs on imports by US President Donald Trump which has disturbed global markets and led to uncertainty.