Intel CEO Lip-Bu Tan: "We will remain focused" on cutting costs and complexity
The new chief pledges to streamline operations and drive efficiency in a high-stakes turnaround.
Intel is undergoing one of the most consequential transitions in its history as newly appointed CEO Lip-Bu Tan takes the helm, aiming to streamline the struggling chipmaker’s operations while reshaping its leadership. The shift comes as three board members prepare to step down, signaling a pivot toward a more industry-focused strategy in an effort to reclaim Intel’s former dominance.
Tan, a veteran of the semiconductor industry, rejoined Intel’s board alongside his appointment as CEO after stepping down last year over disagreements regarding the company’s revival plan. Now, he is at the center of that very transformation. In his first letter to shareholders on Thursday, Tan made it clear that he is equally focused on both Intel’s product business and its contract chip manufacturing unit—a strategy originally championed by former CEO Pat Gelsinger.
“To enable great products, we must remain equally focused on strengthening our product business and our contract chip manufacturing business,” Tan wrote in the annual report to investors, one of his first public statements since taking over on March 12.
“We will remain focused on executing this plan to reduce our operating expenses and capital expenditures, simplify our portfolio and eliminate organizational complexity,” he added, referencing the cost-cutting measures implemented last year under Gelsinger, which included a 15% reduction in Intel’s workforce.
Board reshuffle signals strategic shift
Intel announced in a regulatory filing on Thursday that three board members—Omar Ishrak, former CEO of medical device company Medtronic; Tsu-Jae King Liu, dean of engineering at the University of California, Berkeley; and Risa Lavizzo-Mourey, a former professor at the University of Pennsylvania—will not stand for reelection at the company’s 2025 annual meeting.
Since late last year, Intel has been restructuring its board to focus more directly on the semiconductor industry. In December, the company added Eric Meurice, former CEO of chipmaking equipment giant ASML, and Steve Sanghi, interim CEO of Microchip Technology, to its leadership ranks. These moves mark a significant departure from Intel’s previous board composition, which included leaders from academia, finance, and industries like healthcare and aerospace.
“We are committed to having the right mix of skills, qualifications and technical expertise on the Board,” Intel Chairperson Frank Yeary said in Thursday’s filing. While the three outgoing directors will not seek reelection, all other current board members will remain.
A high-stakes transition
The changes come at a pivotal moment for Intel, which has been fighting to regain ground in a semiconductor industry increasingly dominated by rivals like Taiwan’s TSMC and South Korea’s Samsung. Tan’s leadership will be closely watched as he attempts to execute the company’s ambitious turnaround plan, which hinges on revitalizing Intel’s manufacturing prowess and winning new customers for its contract chipmaking business.
Gelsinger, who was ousted earlier this year, will receive a severance package of approximately $7.9 million but has forfeited all of his unvested equity awards, according to Intel.
Tan will make his first public remarks as Intel’s CEO on Monday afternoon at a company event in Las Vegas, where he is expected to outline further details of his vision for Intel’s future. While acknowledging the difficulties ahead, he struck an optimistic note in his letter to investors.
“While there are clear challenges that we need to overcome, there are also significant opportunities to accelerate our turnaround and improve our performance,” Tan wrote.
