Wall Street says new Intel CEO Lip-Bu Tan is the chipmaker's only shot

A C-suite long in the making at Intel (INTC).

Shares of the beat-up chipmaker rose 12% in premarket trading on Thursday as Intel announced Lip-Bu Tan as its permanent CEO.

Tan was the longtime CEO of Cadence Design Systems (CDNS) from 2009 to 2021. He left Intel's board in August 2024 after serving for two years, following what a source tells me were clashes on how to position the business with now-ousted CEO and near Intel lifer Pat Gelsinger.

The source said Tan was interviewed for the CEO role of Intel at the same time as Gelsinger. Gelsinger ultimately got the gig in 2021 but had to play nice by agreeing to put Tan on the board. Tan frequently pushed for a better artificial intelligence strategy to take on Nvidia (NVDA) and faster decision making in the notoriously bureaucratic Intel.

Listen: What Bill Gates thinks about Intel

"If anyone can save Intel, it's Lip, but it will take years and partners," a source who knows Tan told me. Tan is unlikely to spin off Intel's ailing foundry arm in the near term, but he could move fast to inject cash into the business via a rumored partnership with Taiwan Semiconductor (TSM) and the US government.

More layoffs could be possible as well under Tan, the source added.

Intel declined to make Tan available for an interview.

To be sure, Tan has a mess on his hands at the iconic American tech giant.

Gelsinger led aggressive efforts to turn around the troubled US chipmaker for more than three years. He slashed thousands of jobs, improved costs, secured CHIPS Act funding, built chip foundries, and promised fast AI chips that could compete with Nvidia and AMD (AMD).

He was fired in early December amid missed targets and a cash drain on the foundry business.

Intel's fourth quarter sales fell 7% year over year to $14.3 billion. Net earnings plunged 76%.

The company forecasts it will only break even on the profit line this year.

Here's what Wall Street is saying about Intel's newish executive team pick.

"We're encouraged by this appointment given Lip-Bu Tan's tenure and track record of creating shareholder value as CEO of Cadence and prior experience as an Intel board member. However, given the multitude of challenges that Intel currently faces, we are maintaining our Sector Weight rating, but look forward to hearing more about Mr. Tan's strategy for turning Intel around."

"Having followed Mr. Tan's transformative impact on Cadence Design Systems during his eleven-year tenure as CEO at that company as well as many successful outcomes related to investments across the semiconductor universe, we believe that Mr. Tan is uniquely qualified to attempt a reboot of Intel.