According to a release from Intel Corp., three members of its board of directors are retiring while it redirects all effort to accumulating the expertise it needs for a turnaround. 

The exit of the three board members comes as Intel undergoes significant board restructuring that will allow it to focus better on the chip industry as it nurses dreams of reclaiming the number one spot in the sector.

Intel names new board members as others leave

The three retiring Intel board members are Omar Ishrak, Tsu-Jae King Liu and Risa Lavizzo-Mourey. The trio won’t stand for reelection at the May 6 annual shareholder meeting, according to what the company said in a regulatory filing.

The board will also reportedly be reduced to contain only 11 members after Eric Meurice and Steve Sanghi — two chip industry executives — were appointed as independent directors last year.

“We are committed to having the right mix of skills, qualifications and technical expertise on the board,” Chairman Frank Yeary said in the filing.

These developments follow the appointment of Lip-Bu Tan to the post of chief executive officer. He was brought in to replace Pat Gelsinger, who was dismissed by the board in frustration because they believed the company’s comeback effort was taking too much time.

One of his most glaring failures was his inability to push the company to create an artificial intelligence accelerator chip that could rival what Nvidia Corp was putting out. Unlike Intel, Nvidia has seen its revenue and valuation skyrocket over the past two years because it was able to identify and service the AI computing boom.

Tan, 65, assumed his role as Intel CEO on March 18, according to a company statement. He will also rejoin the board as well after stepping down in August 2024.

After Tan, a former board member and semiconductor veteran, was revealed as his successor, shares of Intel Corp surged by 15%. The pump could be linked to hopes that Tan will be able to turn things around, but the job he has been entrusted with is one of the toughest in the chip industry.

Can Intel’s new star player help it make a comeback?

At its peak, Intel dominated the semiconductor field. However, it is now grappling with several issues, including market-share losses, problems with manufacturing and a considerable decline in its earnings. It also has debt to pay and recently had to dismiss about 15,000 people.

When Intel announced that Tan had been tapped as CEO, the news stoked optimism among investors. The stock surges as high as $23.70 in New York on Thursday, the biggest single-day gain in nearly a month.

Bank of America Corp. analysts also acknowledged Tan’s potential by upgrading the company’s shares to “neutral,” citing Tan’s “solid track record.”

Tan has already set to work. In a memo to his new charge, Tan expressed confidence in his ability to turn things around for Intel.

“That’s not to say it will be easy. It won’t be,” he said. “But I am joining because I believe with every fiber of my being that we have what it takes to win. Intel plays an essential role in the technology ecosystem, both in the US and around the world.”

“This is good for Intel,” said Stacy Rasgon, an analyst at Bernstein. “If I had to pick somebody, Lip-Bu would have been at the top of that list.”

Before he was ousted, Gelsinger had plans to turn Intel into a chip foundry — a contract manufacturer that makes products for outside clients — however the initiative never got past the early stages.

Tan has signaled plans to continue down that path, stating that they will work hard to restore Intel’s position as a “world-class products company,” and establish it “as a world-class foundry” while delighting its customers like never before.

“That’s what this moment demands of us as we remake Intel for the future,” he said in the memo, which was posted on the company’s website.

Despite its struggles, Intel is still one of the world’s biggest chipmakers in terms of revenue, with more than $50 billion in annual sales. Currently, its processors power more than 70% of the world’s personal computers and server machines and the company’s factories still represent a large chunk of worldwide capacity for advanced manufacturing.

Unfortunately, the continuous mistakes that turned up in product development have given rivals a chance to gain an edge they have been jealously protecting.

Nvidia is not the only tech company that has emerged as an Intel rival in recent times. Advanced Micro Devices Inc. has also won more market share in PCs and servers and is reportedly better positioned to make inroads in AI chips.

Intel Chairman Frank Yeary hopes Tan will be able to leverage his experience in reinventing Cadence to help the company.

Tan “drove a cultural transformation centered on customer-centric innovation,” he said. “During his time as CEO, Cadence more than doubled its revenue, expanded operating margins and delivered a stock price appreciation of more than 3,200%. He also knows Intel well, both as a partner when he ran Cadence and having recently served on our board.”

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