Intel CEO Pat Gelsinger delivers a speech at the COMPUTEX forum in Taipei, Taiwan June 4, 2024.
SAN FRANCISCO--The sudden resignation of a high-profile Intel board member came after differences with CEO Pat Gelsinger and other directors over what the director considered the U.S. company’s bloated workforce, risk-averse culture and lagging artificial intelligence strategy, according to three sources familiar with the matter.
Lip-Bu Tan, a semiconductor industry veteran, had said he was leaving the board because of a personal decision to “reprioritize various commitments” and that he remained “supportive of the company and its important work,” in a regulatory filing on Thursday.
The former CEO of chip-software company Cadence Design joined Intel’s board two years ago as part of a plan to restore Intel’s place as the leading global chipmaker. The board expanded Tan’s responsibilities in October 2023, authorizing him to oversee manufacturing operations.
Over time, Tan grew frustrated by the company’s large workforce, its approach to contract manufacturing and Intel’s risk-averse and bureaucratic culture, according to the sources, who were not authorized to speak publicly.
The circumstances around Tan’s exit have not previously been reported. The departure of the industry veteran, who is well-regarded by investors, over Intel's strategy illustrates the uncertainty of its turnaround efforts.
Tan leaves as the company endures one of the bleakest periods in its five-decade history that has left it vulnerable to a potential activist shareholder attack, former executives said. Intel has hired investment bank Morgan Stanley to prepare a defense, according to sources familiar with the matter, confirming an earlier report.
Intel, headquartered in California, declined to comment. Tan’s venture capital firm, Walden Catalyst, did not respond to a request for comment.
Tan’s exit leaves a vacuum of chip-industry technical and business acumen on the board, which is populated by leaders in academia and finance, and former senior executives from the medical, tech and aerospace industries, say investors and semiconductor industry insiders.
Former Intel executives told Reuters the company began preparing for a potential activist threat months ago. Reuters could not independently confirm if any shareholders were preparing an approach.
This month, Intel paused its dividend that it had been paying for decades when it reported results and plans to reduce capital spending on factory construction. The next day, investors wiped more than $30 billion from its market value, or more than a quarter of its worth.
