Tan, who has served on a number of boards including Samba Nova, Nuvia, HPE, Schneider Electric, Softbank and SMIC, among others, was a former Intel board member. However, he resigned in August last year citing frustrations with what he then described as a ‘bloated’ workforce, a ‘risk-averse culture’ and the lack of a convincing AI strategy.
Tan has already said to staff that the company turnaround will not be easy but has expressed confidence that it would be possible to, “restore Intel’s position as a world-class products company, establish ourselves as a world-class foundry and delight our customers like never before.”
In response, shares in Intel have moved higher.
For Tan, this appointment comes with significant challenges. Intel is seen as having missed out on the artificial intelligence-driven semiconductor boom while it has spent billions building out its chip-making business.
There have also been persistent market rumours over the possibility that Intel or parts of the business could be acquired – Broadcom was said to be evaluating acquiring Intel’s chip design business for example.
Intel has been struggling financially and reported several quarters of market share losses in data centres and PCs, as well as billion-dollar losses in its manufacturing business.
As a result, the stock has lost about 60% of its value, while the indexes on which it is listed have almost doubled.
Tan brings ‘deep relationships’ across the chip ecosystem that could draw customers to the company's contract manufacturing business, according to analysts.
His appointment comes just a few weeks after the previous CEO, Pat Gelsinger, was ousted but like Gelsinger, Tan is expected to keep the company’s chip design and manufacturing operations together. Some analysts have suggested that the foundry business may find it difficult to draw orders from chip designers wary of entrusting production to a rival.
Importantly, having been a board member analysts see Tan as knowing where the ‘bodies are buried’ and will be much more realistic when it comes to evaluating the company’s performance and the opportunities going forward.
Whatever the market’s current reactions, and it's been generally positive, any turnaround is expected to take years.
