(Bloomberg)-Intel Corp. They jumped 15% after the company called Lip-Bu Tan as its next executive director, entrusting a former board member and veterans of a semiconductor with one of the most difficult jobs in the chip industry.
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Tan, 65, will take a role on March 18, according to a statement on Wednesday. The Committee will also be repeated after deviation in August 2024.
Tan, former chief of Cadence Design Systems Inc., is in charge of returning the wealth of pioneering chips manufacturer who has become a backlog in the industry. Intel, which has dominated the semiconductor field for decades, has struggled with losses in the market, production of downtime and a sudden decline in earnings. He was also burdened with debt and recently had to reduce about 15,000 jobs.
On Thursday, the announcement sent an investor optimism, which sent shares up to $ 23.70 in New York to New York, which marked the biggest one -day win in almost a month. Bank of America Corp Analysts also upgraded the shares to “neutral”, citing Tan -Ove “solid records”. Over Wednesday, the section has decreased more than 50% in the last 12 months, as the future of the company has become blurry.
In an Intel employee’s employee, Tan said he was convinced that he could turn the job.
“That doesn’t mean it will be easy. It’s not going to be,” he said. “But I join because I believe with every fiber of my being that we have what it takes to win. Intel plays a key role in the technological ecosystem, both in the US and in the world.”
Tan’s predecessor, Pat Gelsinger, expelled the committee due to the perceived failure of the rejuvenation of the Intel product line. One of the brightest challenges: creating a chip for acceleration of artificial intelligence that can submit to Nvidia Corp. -And, that company, once in Intel’s shadow, recorded his revenue and evaluation in the last two years due to AI computer boom.
“This is good for Intel,” said Stacy Rasgon, an analyst from Bernstein. “If I had to choose someone, Lip-Bu would have been at the top of that list.”
Gelsinger also intended to convert the Intel into a chip left -hander – a contractor manufacturer that produces external clients products – but this effort is still at an early stage.
Tan said he would continue that way. “We will work hard to restore Intel position as a worldwide company for products, let us establish a world-class foundry and delight our customers as never before,” he said in MEMO, which has been published on the company’s website. “This is what this moment requires from us as we remodel Intel for the future.”
Intel remains one of the world’s largest chips on revenue, with more than $ 50 billion a year for sales. Its processors are the main component in more than 70% of the world’s personal computers and servers. And the company factories continue to represent a large part of the world’s capacity for advanced production.
However, slipping in the development of products allowed rivals to get the advantage. In addition to Nvidia, Advanced Micro Device Inc. He has won a market share on computers and servers – and is better ready than Intel to get into AI chips. In the shadow of these challenges, Intel is not even in the 10 best chips in the world in market value.
For more: Big Take: How Intel lost the edge (podcast)
Tan, executive director of Malaysia, grew up in Singapore, where he attended Nanyang University and studied physics. He later went to the Massachusetts Institute of Technology, gaining a master’s degree in nuclear engineering. He gave up his doctorate in the field and went to the University of San Francisco, where he received the MBA.
After working in an investigation, he joined the Cadence Committee in 2004. He became a complainant in 2008 after Michael Fister remained and then took over the only possession of that role in 2009. Tan led the company for more than a decade before he moved to the post of chairman, who occupied until 2023.
Cadence, along with Rival Synopsys Inc., dominates the computer design market that is used to create a semiconductor. Their software and services become more and more important with the increase in the complexity of the device. Engineers use their products to create a draft for the schedule of dozens of billions of transistors and connecting wires – basic architecture of small components.
Running of Intel would once be the most prestigious position in the industry. In its peak, Intel profitability was unusually high for a manufacturing company. Its gross margin – a percentage of sales left after the production costs – it was north of 60%. Benchmark is currently decaying about half that level.
When Gelsinger took over the helm in 2021, he was seen as a potential rescuer of the company. But Wall Street is on its turn of turns after a series of disappointing quarterly results – including a report in August 2024. Which analysts described as the worst in their history.
Intel in 2024 was by far the lowest performer on the PHILADLPHIJA semiconductor index, declining 60%. As the company’s assessment fell to the 1990s levels, the once unquestionable idea of downloading Intel became more convincing.
Intel’s new leader will have to move approaches from the courtiers and decide whether to keep Gelsinger’s attitude that the interruption is unnecessary. Some on Wall Street suggested that they share companical designs and production units, which are already surgery.
Qualcomm Inc., Broadcom Inc. And Arm Holdings PlC explored the idea of buying all or part of the Intel, Bloomberg News reported. If the formal approaches are made, the Intel board will be pressured to consider the scenarios that Gelsinger may have refused.
Separately, Trump’s administration approached the rival Taiwanese semiconductor Manufacturing Co. and asked him to consider the share of the Intel factories Spinoff. According to this proposal, which Bloomberg News reported about last month, TSMC would start plants and reconfigure them to use his technology – something that could make them more attractive to external customers. Intel plants are currently focusing on their own designs.
The plan also included trying the largest clients of TSMC – a list including Qualcomm, AMD and Apple Inc. – for investing in Intel Spinoff. But this report followed a week later by announcing the TSMC White House to increase investments in their own complex in Arizona. This suggests that it would rather not be involved in external projects.
Santa Clara, an Intel headquartered in California, is the largest recipient of the American Government Grant according to the Law on Chips and Sciences, which the biden administration pushed to strengthen the domestic production of the semiconductor.
The Chips Law on Money, in the total amount of almost $ 8 billion, depends on Intel, completing a turning point, including the building and equipping new factories around the USA. Intel has already delayed some of its construction plans, including the Ohi complex. President Donald Trump also stated against the program.
Intel’s chairman Frank Yeary said in a separate statement that Tan could use his experience of inventing the cadence. Tan “launched a cultural transformation focused on innovation focused on a customer,” he said.
“During his time as executive director, Cadence has more than doubled his revenue, expanded operating margins, and provided the appreciation of the shares of more than 3,200%,” said Yeary. “He also knows the Intel well, and as a partner when he led a cadence and recently served on our committee.”
If Tan cannot orchestrate a similar turn in Intel, Bernstein’s Rasgon said, “it was probably unyielding.”
-In help, Subrat Patnaik.
(Updates with a division stroke that starts in the first paragraph.)
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