Intel has named Lip-Bu Tan as its new CEO, hoping to turn around the struggling chipmaker after a difficult four-year stretch under Pat Gelsinger. The announcement, made on Wednesday, immediately boosted investor confidence, sending the company’s stock up 12% in extended trading. Tan, a seasoned semiconductor industry veteran, previously led Cadence Design Systems, a firm that provides crucial software tools to major chipmakers, including Intel. While he was a member of Intel’s board until last year, he stepped down due to other commitments. Now, he returns not only as CEO but also as a board member, replacing interim co-CEOs David Zinsner and MJ Holthaus, who had taken over in December after Gelsinger’s abrupt departure.

This leadership change comes at a critical moment for Intel, which has been under intense pressure from investors to cut costs and find ways to regain market relevance. The company has faced a steep decline in sales, falling far behind in the booming artificial intelligence (AI) market, and struggling to justify massive expenditures on new chip manufacturing ventures.

In a statement on Intel’s website, Tan emphasized the need for aggressive action to reshape the company’s trajectory. He acknowledged Intel’s strengths but stressed the importance of taking calculated risks to outpace competitors and speed up progress in areas where the company has fallen behind.

His appointment makes him Intel’s fourth CEO in seven years, underscoring the instability that has plagued the company. Since Brian Krzanich’s resignation in 2018 over a workplace misconduct issue, Intel has cycled through multiple leaders. Bob Swan took over in 2019, but his tenure was short-lived as the company struggled with chip delays and growing competition. He was replaced by Gelsinger in 2021, who pursued an ambitious plan to transform Intel into a major chip manufacturer for other companies. However, this required massive investments, including a $20 billion chip factory in Ohio, leading to skepticism from investors.

Despite these efforts, Intel has struggled to compete with Nvidia, which has dominated the AI chip market with its powerful GPUs. This shift was starkly reflected when Intel was removed from the Dow Jones Industrial Average in November, replaced by Nvidia, a clear sign of changing industry dynamics. Intel’s market value has plummeted, now standing at $89.5 billion, a fraction of Nvidia’s soaring valuation. While Intel’s stock price dropped 60% last year, Nvidia’s skyrocketed 171%.

Amid growing concerns over economic uncertainty, competition, and inventory challenges, investors are hoping Tan can steer the company in a new direction. Frank Yeary, who led the CEO search, expressed confidence in Tan’s leadership, calling him a "proven creator of shareholder value." Now, with the pressure mounting and Intel’s future on the line, Tan faces the daunting task of reviving one of the world’s most iconic semiconductor companies.

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