The question in my headline is a bit of a tease. Intel doesn’t need saving, per se, but its reputation sure needs a makeover, and the company’s new CEO – Lip-Bu Tan – certainly has the chops and smarts to rebuild the financial community’s and the electronics industry’s trust in the once (and future?) semiconductor leader. Many pundits have opined already about Intel’s new CEO, so why trust my opinion? I’ve got experience working for a company run by Tan during his years as Cadence’s CEO, so I don’t need to guess. My closest work friend at Cadence was David Thon, who worked directly with CEO Tan and often told me how the man operates. I spent 18 months at Cadence and another two years working for Intel, so I’ve seen stuff and I know things.
Tan was born in Malaysia and earned a BS in physics at Nanyang University in Singapore. He focused on quantum physics. Because the energy crisis was big at the time, he decided to study nuclear engineering and was working on a PhD at MIT when the Three Mile Island accident occurred. Tan quickly changed gears, got an MS in nuclear engineering, and started working for EDS Nuclear in San Francisco at the age of 19. He then joined a startup consulting firm called ECHO Energy, which needed a CFO. Tan became the CFO by default, and the company sent him to the University of San Francisco (USF) to get an MBA.
Industry veteran Lip-Bu Tan has taken over as Intel’s CEO as of March 18. Image credit: Intel
During his last MBA class at USF, Tan met a senior partner at Chappell & Company, which specialized in financing startup companies. Because of his technical background, the partners invited Tan to work for them part time and immediately put him to work reading and evaluating business plans from companies seeking venture funding. He read 1000 business plans. Eventually, ECHO Energy was sold and Tan became a full-time Assistant VP at Chappell & Company. Five days later, he took charge of private placements at the firm. Tan had launched his career as a venture capitalist. A year and a half later, Tan was ready to launch his own venture firm and founded Walden International in 1987 along with two established venture partners, Art Berliner and George Sarlo.
Walden International’s first investment was Mouse Systems, an early vendor of optical mice. (I was an early customer of Mouse Systems at Cadnetix in the early 1980s.) Tan spent six months as an interim CEO of Mouse Systems while the company searched for a permanent CEO. It was his first taste of being a CEO. When KYE Systems of Taiwan bought Mouse Systems in 1990, Tan invested in KYE, which triggered a series of investments in Asian companies by Walden International. Asian investments were a natural fit, given Tan’s background, although he explains in his oral history that it was just an excuse to visit his mother in Singapore. Soon, Walden International had made investments in companies located in China, Indonesia, Malaysia, and the Philippines. According to Tan, Walden International was one of the first companies to bring the concept of venture capital to Asia.
Initially, Tan focused Walden International’s investments on technology, but he’s sharpened the focus to the semiconductor industry for the last two decades because he views semiconductors as foundational technology. It’s the killer app, he explains in his oral history. In 2008, Cadence’s interim CEO Ray Bingham invited Tan to replace the outgoing Mike Fister as Cadence’s CEO. He reluctantly agreed to a three-month stint as “acting” CEO, then made the job permanent in January 2009. Then, in true Lip-Bu Tan style, he visited 1500 Cadence customers, and consequently learned a lot about the company’s strengths and weaknesses Tan stayed on as Cadence’s CEO for well more than a decade. He stepped down from the CEO position in 2021, more than a decade after taking on the job as “acting CEO.” It was a long acting gig.
Meanwhile, Walden International continued to invest in semiconductor startups and, over time, Tan has met most of the players in the semiconductor industry. He likely has the direct phone number for every CEO of every important Cadence customer on one of the two mobile phones he keeps on his belt, and he maintains those relationships personally. It’s no wonder that interim Executive Chair Frank D. Yeary, who took on that role during Intel’s search for a new CEO, said this about Tan: ““Like many across the industry, I have worked closely with Lip-Bu in the past and have seen firsthand how his relentless attention to customers drives innovation and success.”
On LinkedIn, Ahmadreza Farsaei, a principal software engineer currently working at Intel, provided a similar perspective, but from the trenches:
“During my time at Cadence, I had the opportunity to witness Lip-Bu Tan leadership up close. What stood out the most was his ability to balance vision with humility – always pushing for innovation while staying deeply engaged with the people driving it. As we worked on advancing our photonic solution, I saw firsthand how he encouraged bold thinking, challenged the status quo, and recognized the potential of emerging technologies.”
I’ve read pundits who say that Lip-Bu Tan lacks semiconductor experience. I don’t believe that for one second, and you shouldn’t either. Although Tan isn’t a process guy, he’s an information sponge, a physicist, and a nuclear engineer. He’s spent decades absorbing the ins and outs of semiconductor manufacturing. He has learned the technical and business details of making semiconductors because he had to know that sort of information to evaluate potential venture opportunities for Walden International.
Because it supplies EDA tools to nearly every company that designs and/or manufactures ICs, Cadence must maintain close relationships with the world’s semiconductor foundries and independent device manufacturers, including deep relationships with many companies in Intel’s extended ecosystem, and Lip-Bu Tan was the number one person at Cadence who was responsible for maximizing the benefits of those relationships. His experience will directly benefit Intel as the company tries to establish itself as a major semiconductor foundry through Intel Foundry Services (IFS).
As the new CEO of Intel, Tan is stepping into the world’s largest semiconductor duopoly, the severely SKUed world of x86 processors, which envelops Intel and AMD. Tan has spent more than a decade dealing with a similar duopoly, in the EDA arena: Cadence and Synopsys. You can bet that Tan has learned more than a few things about dealing with a heavyweight competitor. I fully expect Tan to apply those lessons as he faces off against CEO Lisa Su at AMD. Again, Tan seems more than up to the task.
There are some pundits calling for Intel, with Tan at the head, to immediately release some sort of effective competition for Nvidia GPUs, a market that Intel has badly fumbled. Even if Intel were to introduce a fabulous GPU or AI chip tomorrow, the silicon is useless without software and an infrastructure to support that software. Nvidia’s proprietary Cuda programming language acts as a nearly insurmountable barrier – a wall – against simple competitive moves in the AI space. I don’t expect to see a quick remedy for Intel’s trailing position in the AI arena. Intel can’t even buy its way out of this problem because there’s no worthy Nvidia competitor to buy that could possibly catapult Intel into a leadership position in the AI segment. Intel has bought three AI companies so far, by my count, and the results have produced nothing but red ink. Don’t go looking for miracles here.
On the other hand, there are already published accounts of a major managerial restructuring in the works. A Reuters article by Max A. Cherney (see “Exclusive: Intel’s new CEO plots overhaul of manufacturing and AI operations“) posits that Tan may take an ax or, as has suddenly become popular, a chainsaw to Intel’s middle management. That’s certainly not beyond the scope of things Tan might do. As an experienced VC, he’s quite used to downsizing staff to make a company’s numbers work.. He may also find Intel’s marketing departments to be excessively large, especially because Tan is quite accustomed to operating as a one-person marketing department.
Tan’s oral history was taken while he was Cadence’s CEO, long before his new gig at Intel. In that oral history, Tan describes the management philosophy he brought to Cadence, which is undoubtedly what he’ll bring to Intel:
“I used to play basketball and volleyball on college teams, and I have always believed in the ‘one team’ culture. So, the company [Cadence] was quite dysfunctional, with a lot of silos, and I tried to change it to a one-team culture, so that we could work as one team. That’s one big thing I focused on, and today, I still focus on. Secondly, it’s important to listen to the customer and then put customer focus as the number one priority, to make sure that we are very focused on delighting the customer. Thirdly, I put my VC training to work. If you are behind, you have to leapfrog the competition. You have to recruit the best talent and then make sure that you have a plan to leapfrog the competition by changing your designs to be better.”
That sure sounds like a dose of what Intel needs to get back at least some of the company’s lost mojo.
