Intel (INTC 16.03%) stock is surging higher in Thursday's trading following the announcement of the company's next CEO. The company's share price was up 15.6% as of noon ET.
Intel announced yesterday Lip-Bu Tan as its new CEO yesterday. Tan was previously the CEO of Cadence Design Systems and had also served on Intel's board of directors prior to resigning last year. Investors are excited about what his appointment to the Intel CEO role could mean for the company.
Lip-Bu Tan will officially step into the CEO role on March 18, and the tech industry veteran will have his work cut out for him. Intel is facing tough competition in the chip design space, with the company losing market share in its core PC and server markets recently.
Tan will also have to decide the fate of the company's semiconductor foundry business. The foundry unit has been racking up big losses, and its roadmap to scaling third-party production contracts is uncertain. Tan has indicated that he will stick with former CEO Pat Gelsinger's plan to make the foundry a major part of the business's long-term strategy, but investors may be betting that the company's new leader will leave the door open to other approaches.
Intel's CEO announcement arrived the same day as a report suggesting that the company could potentially sell its foundry business to Taiwan Semiconductor Manufacturing, Nvidia, Advanced Micro Devices, and Broadcom. Determining what to do with the foundry unit is the first major test for Tan, and it will have a big impact on the company's long-term future. Intel is going through a major transition period, and its approach to the foundry question represents a key fork in the road that will have a foundation-level impact on the business.
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