Jakarta, IndonesiaSentinel.com — Lip-Bu Tan, a prominent figure in the semiconductor industry and Intel board member, has unexpectedly stepped down from his position, reportedly due to disagreements with CEO Pat Gelsinger and other directors. The conflicts centered around the company’s workforce size, its risk-averse culture, and its lagging AI strategy compared to other American tech giants.
Tan, a veteran in the semiconductor field, joined Intel’s board two years ago with the mission of restoring the company’s status as a leading global chip manufacturer.
He was later given expanded responsibilities, including oversight of manufacturing operations in October 2023.
However, according to sources cited by Reuters, Tan grew increasingly frustrated with Intel’s bloated workforce, its approach to contract manufacturing, and what he perceived as a bureaucratic, risk-averse corporate culture. These factors reportedly played a significant role in his decision to resign, a move that had not been previously reported.
In a statement, Tan described his departure as a personal decision to “reprioritize various commitments.” His resignation comes at a challenging time for Intel, which has been facing one of its most difficult periods in history.
Intel has declined to comment on Tan’s resignation, and his venture capital firm, Walden Catalyst, has also not responded to requests for comment.
Intel’s Struggles Exposed
Tan’s departure leaves a gap in technical and business expertise on Intel’s board, which is now primarily composed of individuals from academia, finance, healthcare, technology, and aerospace sectors.
The company has been struggling recently, including suspending its decades-long dividend payments as it reported results and plans to cut capital expenditures aimed at factory expansion.
More than $30 billion has been wiped from Intel’s market value as it grapples with aggressive competition and booming demand in the AI sector. The AI boom has turned Nvidia, a major graphics chipmaker, into a company with a $3 trillion market capitalization. Intel, meanwhile, missed a key opportunity in 2018 to acquire a 30% stake in OpenAI, the company behind ChatGPT.
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Intel’s recovery strategy hinges on expanding its foundry business, which aims to produce chips for other companies similar to TSMC. However, the company has yet to reveal its clients and has stated that the new business is not expected to be profitable until 2027.
Last year’s attempt to break into contract manufacturing by acquiring Israel-based chipmaker Tower Semiconductor for $5.4 billion was thwarted when China blocked the deal. Without Tower, Intel remains primarily a chipmaker with limited value in working with external customers.
(Ray)
