Semiconductor giant Intel has appointed Lip-Bu Tan, a seasoned veteran in the industry, as its new CEO, effective immediately. This move comes three months after Pat Gelsinger stepped down from the helm and retired from the company's board. In the interim, Intel's CFO David Zinsner and Executive Vice President of Client Relations Michelle Johnston Holthaus had been serving as co-CEOs.

Tan, who previously served as the CEO of Cadence Design Systems, rejoins Intel's board and takes the reins at a critical juncture in the company's history. Intel has faced significant challenges in recent years, struggling to keep pace with its peers in the semiconductor industry. When Gelsinger took the helm in February 2021, Intel was already grappling with the consequences of missing out on the smartphone revolution and missteps in chip fabrication.

The semiconductor industry has undergone significant consolidation in recent years, with notable deals including AMD's acquisition of Xilinx for $35 billion and Analog's purchase of Maxim for $21 billion. Against this backdrop, Gelsinger's tenure at Intel was marked by efforts to modernize the company and regain its footing.

One of Gelsinger's key initiatives was the IDM (integrated device manufacturing) plan, which aimed to boost chip production in the US and beyond. The first phase of this plan involved a $20 billion investment to build two new chip manufacturing facilities in Arizona. In 2022, Intel announced the second phase of IDM, which included a three-pronged approach to chip manufacturing: Intel's fabs, third-party global manufacturers, and building out the company's foundry services.

As part of this plan, Intel announced its intention to acquire Tower Semiconductor for $5.4 billion to enhance its custom foundry services. However, the deal ultimately fell through due to regulatory hurdles, dealing a significant blow to Intel's modernization efforts.

In the lead-up to Gelsinger's retirement, Intel faced significant challenges, including a plummeting stock price, which dropped by around 50% from the beginning of 2024 to his departure in December. The company also announced plans to lay off 15% of its workforce, or approximately 15,000 people, in August following dismal second-quarter results. Gelsinger attributed the company's struggles to its inability to capitalize on the AI boom, which had benefited its rivals.

Since Gelsinger's departure, Intel has faced further setbacks, including the delay of its Ohio chip factory and the decision not to bring its Falcon Shores AI chips to market. However, with Tan at the helm, there are signs that the company may be turning a corner. Intel recently finalized a deal with the US Department of Commerce to receive a $7.865 billion grant for domestic semiconductor manufacturing through the US Chips and Science Act, with $2.2 billion of that grant money already received.

The company has also notched a win with the popularity of its Arc B580 graphics card, which sold out following positive early reviews. As Tan takes the reins, he will be tasked with guiding Intel towards a brighter future, leveraging his extensive experience in the semiconductor industry to revitalize the company and drive growth.

With Tan's appointment, Intel is poised to embark on a new chapter in its history, one that will be marked by a renewed focus on innovation, competitiveness, and growth. As the company navigates the complex landscape of the semiconductor industry, Tan's leadership will be instrumental in shaping Intel's future and reclaiming its position as a leader in the field.