Lip-Bu Tan, the man trying to save Intel
INTEL, AMERICA’S semiconductor giant, has had some notable bosses. Robert Noyce, its first, invented the silicon chip that gave Silicon Valley its name. Gordon Moore, who came next, etched his place in tech lore with a prediction—Moore’s Law—that processing power would double every two years at the same cost. Andy Grove, the third boss, turned Intel into a semiconductor juggernaut, driven by the mantra that “only the paranoid survive.” The latest to join this lineage is Lip-Bu Tan, who took over in March.
His more immediate predecessors have been less illustrious. Mr Tan inherits a company that has lost its edge. Intel is faltering in areas where it once led, from designing processors to running advanced chip factories. Reviving the firm may be the hardest task any of its leaders has faced.
Mr Tan is no stranger to chips—or to comebacks. Like many of today’s semiconductor bosses (including Jensen Huang of Nvidia, the world’s most valuable semiconductor firm), he traces his roots to South-East Asia. Mr Tan was born in Malaysia and brought up in Singapore. His father was a newspaper editor, and his mother was a teacher. He moved to America to study nuclear engineering at the Massachusetts Institute of Technology before earning a business degree in California. In 1987 he launched Walden International, a venture-capital (VC) firm named after the pond made famous by Henry Thoreau, a 19th-century American writer whose contrarian spirit Mr Tan admires.
At a time when most tech investors were chasing software start-ups, Mr Tan bet on unglamorous hardware. Walden was among the first VC firms to back Asia’s emerging chip industry, particularly in China and Taiwan. In 2001 Mr Tan became an early investor in Semiconductor Manufacturing International Corporation, China’s largest chip foundry, and sat on its board until 2018—two years before America put sanctions on the firm.
In 2009 he moved from investing in companies to running one. He became chief executive of Cadence Design Systems, a struggling chip-design software firm. The company was reeling from executive turnover and underwhelming products. Mr Tan recalls asking customers to rate Cadence’s offerings—and receiving “quite a few Ds and a few Fs.” He devoured books on how to be a CEO, reading “every page”. The homework paid off. Mr Tan gave his managers the freedom to run their divisions, strengthened links with customers and made some clever acquisitions. By the time he stepped down in 2021, Cadence’s revenue had more than tripled and its share price had risen 48-fold—thrice as much as the Philadelphia Semiconductor Index, which tracks the broader industry. Morris Chang, founder of TSMC, the world’s largest chip manufacturer and an Intel rival, has credited Mr Tan with leading Cadence “out of trouble”.
Intel’s investors—and its 110,000 employees—will be hoping he can repeat the feat. The company was once the world’s largest chipmaker. But it missed the mobile-chip boom of the 2000s by focusing too narrowly on personal computers. In the mid-2010s, repeated manufacturing slip-ups allowed AMD, a domestic rival, to claw away a share in its core business of central processing units. At the same time, Intel ceded the lead in advanced chip manufacturing to TSMC. Most damaging of all, it has been largely absent from the booming market for specialist AI chips, now dominated by Nvidia.
Intel’s revenues have fallen from $79bn in 2021 to $53bn in 2024. Its market value is now around $90bn—less than half what it was a year ago. TSMC is worth around eight times as much as Intel; Nvidia is worth thirty times.
Barely a month into the job, Mr Tan is already making big changes. Pat Gelsinger, his predecessor had already cut 15% of the workforce, but insiders say Mr Tan, who previously sat on Intel’s board, had pushed for deeper reductions. Mr Tan has promised to strip out layers of management and turn Intel into “a big startup.”
He appears committed to keeping Intel’s chip design and manufacturing arms under one roof, rather than splitting the company in two. That will be tough. Intel is trying to compete with Nvidia in AI chips and with TSMC in fabrication—two very different businesses. It also remains heavily reliant on handouts from the American government to fund its new factories. And trade tensions with China, which generates nearly a third of Intel’s revenue, add to the risk.
Mr Tan is not easily rattled. “He doesn’t like to lose,” says one associate. If that resolve—and a dash of Thoreauvian contrarianism—can steer Intel out of its slump, he may yet earn his place alongside the company’s greats. ■