Intel Bets on New CEO Lip-Bu Tan—Will the Foundry Gamble Pay Off?

Intel has appointed Lip-Bu Tan as its new CEO, effective March 18th, following significant challenges including a fifty-four percent drop in share prices over the past year and the departure of Pat Gelsinger, who was pushed out after less than four years in the role. Tan, a seasoned tech investor and previously the CEO of Cadence Design Systems, is tasked with reviving Intel’s fortunes and navigating its controversial foundry strategy aimed at expanding manufacturing capabilities. Investors responded positively to Tan’s appointment, with Intel’s stock price rising over eleven percent in after-hours trading. Tan, who also served as a board member at Intel from 2022 to 2024, expressed his eagerness to build upon Intel’s strengths, focusing on its powerful computing platform and strong manufacturing capabilities. As Intel seeks to compete in the semiconductor market, particularly in areas like smartphone and artificial intelligence chips, Tan’s leadership is viewed as crucial to restoring the company’s standing in the competitive tech landscape. The board is looking to see if Tan will pursue Intel’s previous chipmaking strategy or consider spinning off parts of its manufacturing operations, aiming to restore Intel’s position as a leading product company while offering both manufacturing and chip design services.   Tan has indicated his commitment to the company’s controversial foundry strategy.

Taiwan Semiconductor Manufacturing Company, or TSMC, has proposed a joint venture to operate Intel’s foundries, aiming to acquire no more than fifty percent stake. This comes as TSMC seeks partnerships with major U.S. chip designers, including Nvidia, Advanced Micro Devices, and Broadcom. Talks are still in the early stages, but interest has also been expressed by Qualcomm. The proposal follows Intel’s recent net loss of eighteen point eight billion dollars in 2024, marking its first loss since 1986. The U.S. government, under the Trump administration, is closely monitoring this situation, as it aims to bolster American manufacturing. If finalized, this deal would require approval from the administration, which has concerns about foreign ownership of Intel’s operations.

Why do we care?
Pat Gelsinger’s departure signals investor dissatisfaction with Intel’s ability to execute on its foundry ambitions and regain lost ground in high-performance computing. Lip-Bu Tan’s appointment, given his background as an investor and former CEO of Cadence Design Systems, suggests that Intel is moving toward a more aggressive restructuring strategy.

For IT service providers, a revitalized Intel could mean better pricing and availability of chips—especially in server infrastructure, AI workloads, and edge computing. However, Tan’s commitment to the foundry model suggests that Intel will continue its costly pursuit of manufacturing independence, a strategy that has yet to yield clear returns.

From a risk perspective, if Tan pivots Intel toward a more focused, product-first strategy, it could mean a stronger push into AI accelerators, x86 dominance in the data center, and a resurgence in enterprise solutions. On the other hand, if Intel remains stuck between being a manufacturer and a product company, we may see continued instability, impacting product roadmaps and availability for MSPs and enterprises relying on Intel’s chips.
For MSPs and IT providers, a weaker Intel would mean a future where AMD, Nvidia, and Arm-based solutions dominate, requiring shifts in vendor partnerships and technical expertise.