Pat Gelsinger gives Intel's new CEO Lip-Bu Tan a warm welcome, expecting him to finish the story of the "revitalization" of Team Blue.
Pat Gelsinger Warns Intel's New CEO About Wall Street's "Short-Termism" Approach, Claiming It Will Be a Massive Challenge
Well, Gelsinger's reign over Intel, which started in 2021, marked the beginning of a rework, especially with how the former CEO approached the foundry business. Unfortunately, he couldn't execute his ambitions, as he was ousted from his office in December 2024 and replaced by Lip-Bu Tan. Now, in an interview with CNBC, Gelsinger has shown optimism toward the future of Intel's new CEO and given him pointers on what Wall Street expects from him.
I was committed to and wanting to finish that story on the revitalization of Intel and with the board, the company, and now with Lip-Bu's leadership, you are really cheering them on to finish.
Because the role that Intel plays in the semiconductor industry is critical and one that's important not just for the industry but for the US, so I could not be more supportive of the team and Lip-Bu in finishing their journey.
When asked about the reason behind Intel's decline in recent years, Gelsinger says that building up a "next-generation technology fab network" requires a hefty investment, which simply wasn't sustainable for Intel, given its expectations from Wall Street and business norms built over the years. Gelsinger still believes that his IDM 2.0 strategy, which was to create a world-class leading foundry, is still the right approach, one that will ensure heavy "capital returns."
Intel's former CEO also criticized Wall Street's short-termism approach towards the company, claiming that transforming a company from the ground up in a limited time isn't something that Wall Street looks optimistic about. Here, by short-termism, he likely meant how the priority of Intel should be to maintain stock value in the eyes of Wall Street, but this simply didn't align with Gelsinger's aspirations, which was one of the reasons he was asked to step down from his position.
Gelsinger says Intel's new CEO, Lip-Bu Tan, will face Wall Street as a challenge, but he expects him and the team to keep up the progress and the IDM 2.0 strategy Gelsinger initiated in his term. While we are unaware of what to expect from Tan for now, we know that things wouldn't be easy for Intel during the initial part of his tenure.
