According to reports, Intel Corp. has named Lip-Bu Tan as its next chief executive officer, entrusting a former board member and semiconductor veteran with one of the toughest jobs in the chip industry.

On March 18, Lip-Bu, who is 65, will take up the position. He will also return to the board after leaving in August 2024.

Tan, the former CEO of Cadence Design Systems Inc., has been given the responsibility of turning around a trailblazing chipmaker that has fallen behind in the industry. After dominating the semiconductor industry for decades, Intel is currently facing manufacturing problems, a sharp drop in earnings, and losses in market dominance. In addition, it has debt and recently had to lay off roughly 15,000 employees.

Lip-Bu says, “That’s not to say it will be easy. It won’t be. 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.”

After climbing 4.6 percent in regular New York trading, Intel shares surged over 10 percent on the announcement. As the company's future grew more uncertain, the shares fell more than 54 percent over the previous 12 months, bringing its market worth down to $89.5 billion.

The board dismissed Tan's predecessor, Pat Gelsinger, citing what they saw as his inability to revitalize Intel's product range. Developing an AI accelerator processor that can compete with Nvidia Corp.'s products is one of the most obvious hurdles. Over the past two years, the AI computing revolution has caused that company, which was once in Intel's shadow, to see a sharp increase in both revenue and valuation.

“This is good for Intel,” says Stacy Rasgon, an analyst at Bernstein.

“If I had to pick somebody, Lip-Bu would have been at the top of that list,” adds Stacy.

Pat had also set out to turn Intel into a chip foundry — a contract manufacturer that makes products for outside clients — but that effort is still in its early stages.

Pat says, “We will work hard to restore Intel’s position as a world-class products company, establish ourselves as a world-class foundry, and delight our customers like never before. That’s what this moment demands of us as we remake Intel for the future.”