Intel Approaches Ex Board Member Lip-Bu Tan, Others As CEO Replacement

The roller-coaster events at Intel continues this week, as the search for a replacement CEO to led the troubled chip giant continues.

Reuters reported that Intel has started shortlisting a handful of candidates, including former board member Lip-Bu Tan, for the role of chief executive.

It comes after Intel had announced last Sunday that CEO Pat Gelsinger “retired from the company after a distinguished 40-plus-year career and has stepped down from the board of directors, effective 1 December 2024.”

Lip-Bu Tan approached

Gelsinger’s departure came reportedly after a contentious board meeting last week over his perceived failure to respond to Nvidia’s competitive edge and a lack of confidence in his turnaround plans.

Intel named two senior leaders, David Zinsner and Michelle (MJ) Johnston Holthaus, as interim co-chief executive officers while the board conducts a search for a new CEO.

Now according to the Reuters report, which cited people familiar with the matter, Intel’s board been shortlisting Gelsinger’s replacement, and is expected to make a final decision on his replacement in the coming weeks.

In recent days the board reportedly approached former board member Lip-Bu Tan to gauge his interest in taking up the job, the sources said, requesting anonymity as the discussions are confidential.

The deliberations on CEO succession are at an early stage, the sources said, cautioning that Intel has not yet zeroed in on any candidate to replace Gelsinger who stepped down from his role on Monday after being given the choice to retire or be removed.

Intel’s board is also evaluating other candidates, one of the sources said.

Remarkable development

Lip-Bu Tan is a respected chip industry veteran, and if Intel does succeed in recruiting him, it will be a remarkable development.

It was only in August 2024 when Lip-Bu Tan had suddenly informed Intel’s board that he would be leaving, “effective immediately.”

“I am grateful for the opportunity to serve on the Intel Board of Directors,” Lip-Bu Tan was quoted as saying at the time. “This is a personal decision based on a need to reprioritise various commitments and I remain supportive of the company and its important work.”

Lip-Bu Tan had been brought in two years ago to help with the chipmaker’s turnaround efforts.

He is an industry veteran with vast experience. Tan had served since 2021 as executive chairman of Cadence, and since 2004 as a member of its board. He also served as CEO of Cadence from 2009 to 2021 and as president from 2009 to 2017.

He also served on the boards of Credo Technology Group and Schneider Electric SE. At Carnegie Mellon University, Tan served on the board of trustees and the School of Engineering Dean’s Council; and at the University of California, Berkeley, he served on the Engineering Advisory Board and its Division of Computing, Data Science, and Society Advisory Board.

Previously, he served as a director of several public companies, including SoftBank Group Corp. from 2020 to 2022; Hewlett Packard Enterprise Company from 2015 to 2021; Advanced Micro-Fabrication Equipment China; and Flextronics International Ltd.

Tan holds 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.

Tan was named the 2022 recipient of the Semiconductor Industry Association’s highest honour, the Robert N. Noyce Award.

Tan is also founding managing partner of Celesta Capital and Walden Catalyst Ventures.

Frustrated departure

Lip-Bu Tan’s departure from Intel’s board in August came amid media reports of differences with Pat Gelsinger and other directors over what Tan considered Intel’s bloated workforce, risk-averse culture, and lagging artificial intelligence strategy.

Intel’s board had expanded Tan’s responsibilities in October 2023, authorising him to oversee manufacturing operations.

But over time, Tan reportedly grew frustrated by Intel’s large workforce, its approach to contract manufacturing, and Intel’s risk-averse and bureaucratic culture.

Tan’s exit reportedly left a vacuum of chip-industry technical and business acumen on Intel’s board, which Reuters previously noted is populated by leaders in academia and finance, and former senior executives from the medical, tech and aerospace industries.

Troubled Intel

Intel in August 2024 shocked the world when it revealed disappointing second quarter financial results, and confirmed it would cut 15 percent of its 116,500 strong workforce (roughly 15,000 jobs), as it struggled to deliver on its long-running and stuttering turnaround plan.

CEO Gelsinger added to the shock with his confirmation that “costs are too high, our margins are too low”, and this coupled with weak forecasts and the suspension of dividend payments to investors, triggered the largest single day drop in Intel’s stock price in 50 years, after it plummeted 26 percent on 2 August. This caused Intel’s market value to sink more than $32 billion in a single day.

Angry Intel shareholders then sued the firm, alleging the chipmaker fraudulently concealed problems that led it to post weak Q2 results, slash jobs and suspend its dividend payment.

Later that month Intel began exploring its strategic options, allowing the board to consider a full range of options, including splitting off and selling the foundry businesses.

In the end the board opted to pause its factories in Germany and Poland, and spin off its foundry business, as it carried out the huge number of job layoffs.

Then last weekend the board “retired” Geslinger after allegedly losing confidence in his turnaround plan.