Lip-Bu Tan, a prominent board member at Intel Corp. INTC, resigned following disputes with CEO Pat Gelsinger and other directors over the company’s direction. The resignation was announced last week.
What Happened: Tan, a semiconductor industry veteran, cited personal reasons for his departure, stating he needed to “reprioritize various commitments” but remained supportive of Intel’s mission. However, Reuters sources revealed that Tan was frustrated with Intel’s large workforce, risk-averse culture, and lagging artificial intelligence strategy.
Tan’s exit leaves a significant gap in chip-industry expertise on Intel’s board. The former CEO of Cadence Design joined Intel two years ago to help restore its status as a leading global chipmaker. His responsibilities were expanded in October to include overseeing manufacturing operations.
Intel has faced significant challenges, including layoffs, a paused dividend, and reduced capital spending. The company is also preparing for a potential activist shareholder attack, having hired Morgan Stanley to assist in its defense, according to the Reuters report.
Intel did not immediately respond to Benzinga's request for comment.
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Why It Matters: The resignation of Lip-Bu Tan comes at a critical time for Intel. The company has been struggling with various financial and operational challenges. Recently, Intel reported weak second-quarter results, missing analyst expectations significantly. The company announced a new cost reduction plan, including a 15% headcount reduction, which has affected its stock performance.
Additionally, Intel’s efforts to revive its AI strategy have been under scrutiny. The semiconductor sector is increasingly divided between AI winners and losers, with companies like NVIDIA Corp. NVDA leading the way. Analysts have emphasized the importance of prioritizing AI to stay competitive in the industry.
Furthermore, Intel’s recent negotiations with SoftBank Group Corp. to produce an AI chip reportedly fell through. This failure has shifted SoftBank’s focus to other manufacturers.
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This story was generated using Benzinga Neuro and edited by Kaustubh Bagalkote
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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