The appointment, effective March 18, comes three months after Intel ousted CEO and company veteran Pat Gelsinger, whose costly and ambitious plan to turn the company around was faltering and sapping investor confidence.
Tan, a former Intel board member, had been seen as a CEO contender thanks to his deep experience in the chip industry as well as a longtime technology investor in promising startups. He was approached by Intel's board in December to gauge his interest in taking up the job, Reuters had reported.
"Together, we will work hard to restore Intel's position as a world-class products company, establish ourselves as a world-class foundry and delight our customers like never before," Tan said in a letter to Intel employees on Wednesday.
Intel shares surged 12% in extended trading on Wednesday, and analysts welcomed the move that they said was likely to bring some stability to the chipmaker. The company's stock had declined 60% in 2024.
Intel is undergoing a historic transition as it attempts to emerge from one of its bleakest periods.
While struggling to cash in on a boom in investment in advanced AI chips that has fired up the fortunes of market leader Nvidia (NVDA.O) and other chipmakers, the company is spending heavily to become a contract manufacturer of chips for other companies, leading some investors to worry about pressure on its cash flows.
Media reports in the past two months said chip rivals including Broadcom (AVGO.O) were evaluating Intel's chip design and marketing business, while TSMC (2330.TW) has separately studied controlling some or all of Intel's chip plants, potentially as part of an investor consortium or other structure.
Reuters reported on Tuesday that TSMC had approached some of Intel's biggest potential manufacturing customers about forming a joint venture to operate Intel's factories, after U.S. President Donald Trump's administration requested TSMC to help turn around the troubled chipmaker.
"This (Tan's appointment) is welcome news," said Jack E. Gold, analyst and president of J. Gold Associates, which covers the chip industry.
Tan has an "intrinsic understanding of the semiconductor industry, both from a product design aspect as well as the needs of enabling chip manufacturing - an area that Intel Foundry needs help in making their tools more user-friendly and accessible for potential customers," he said.
Gold and other analysts agreed that Tan's messaging looked like he wanted to keep the company together, though they said any transformation of the chipmaker would take years and require investors to be patient.
'LONG ADMIRED'
"Intel is a company I have long admired," Tan said in his letter on Wednesday, expressing confidence in turning the business around.
Tan, 65, is a Malaysian-born executive who grew up in Singapore and holds degrees in physics, nuclear engineering and business administration.
He served as CEO of Intel supplier and chip-design software Cadence Design Systems (CDNS.O) from 2009 to 2021. During his term, the company's revenue and stock surged.
Tan left Intel's board last year over disagreements on how to turn around the company. He grew frustrated by the company’s large workforce, its approach to contract manufacturing and Intel’s risk-averse and bureaucratic culture, Reuters previously reported.
Tan will rejoin the board, Intel said.
Tan "brings stability and experience to a role that needs someone of his caliber, which is why I believe the company will likely stay the course with his appointment and continue to develop foundry and product," said Anshel Sag, principal analyst at Moor Insights & Strategy.
Tan's appointment comes as Trump pushes for more manufacturing in the country, threatening tariffs on imports that have roiled global markets for weeks.
While Trump has made no direct comment about Intel publicly, he has said that Asian countries including Taiwan have snatched away the United States' edge in chipmaking.
Earlier this month, Intel rival TSMC said at a press event with Trump that it plans to make a fresh $100 billion investment in the U.S. that involves building five additional chip facilities.
Trump, though, is trying to kill a 2022 bipartisan law to give $52.7 billion in subsidies for chips, under which Intel has received grants.
