Intel’s (INTC) stock is up 12% in premarket trading on news that the chipmaker has appointed Lip-Bu Tan as its new permanent CEO.
Tan previously served as CEO of Cadence Design Systems (CDNS), which makes software used by all the major chip designers, including Intel.
Tan has also served on the board of directors at Intel, although he stepped down last year saying he had other commitments.
Tan replaces Intel’s interim co-CEOs David Zinsner and MJ Holthaus, who took over running the company last December after the abrupt departure of former CEO Pat Gelsinger.
Tan is also rejoining Intel’s board. He takes the helm of the chipmaker as it tries to recover from a tough four-year run under Gelsinger when the company’s stock declined nearly 75%.
Under Gelsinger, Intel spent billions of dollars to pivot from solely designing microchips and processors to also producing them through a foundry business.
The costly and difficult transition ultimately cost Gelsinger his job as investors pressured the company to reduce costs and spinoff businesses amid declining sales.
The company has been accused of losing focus, missing the artificial intelligence (A.I.) boom, and losing ground to rivals such as Nvidia (NVDA) and Advanced Micro Devices (AMD).
Intel’s stock was removed from the Dow Jones Industrial Average last year and replaced by Nvidia.
Tan becomes the fourth permanent CEO at Intel in the last seven years. There are rumours that Intel might be a takeover target, although no deals have emerged.
The stock of Intel has declined 52% in the last 12 months to trade at $20.68 U.S. per share.
