Intel Foundry Chief Announcement Spells Trouble For The Tower Semi Acquisition

Why wait >3 months before choosing an obvious in-situ candidate?

Intel yesterday issues press release announcing the appointment of Stuart Pann as General Manager of Intel Foundry Services:

SANTA CLARA, Calif.--(BUSINESS WIRE)-- Intel Corporation today announced the appointment of Stuart Pann as senior vice president and general manager of Intel Foundry Services (IFS), Intel’s commercial foundry business. Pann will report to Intel CEO Pat Gelsinger and drive continued growth for IFS and its differentiated systems foundry offering, which goes beyond traditional wafer fabrication to include packaging, chiplet standards and software, as well as U.S.- and Europe-based capacity.

Pann is an Intel veteran, having served as corporate vice president and general manager of the company’s Business Management Group with responsibility for pricing, revenue and forecasting functions for the microprocessor and chipset operations.

He departed Intel in mid 2014 to take up a role with HP as their Chief Supply Chain Officer. Once Pat Gelsinger returned to Intel to take up the CEO role, he was instrumental in bringing Pann back into the company and he rejoined in mid 2021 as a senior VP in the corporate planning group.

In October 2022, Intel issued a press release and it concerned a new (or additional) role for Pann:

To facilitate this effort, I have established an IDM 2.0 Acceleration Office, which will be led by Stuart Pann, Senior Vice President of our Corporate Planning Group (CPG). In addition to his responsibility leading CPG, Stu will take on the role of Chief Business Transformation Officer, reporting to Chief Financial Officer Dave Zinsner and joining the executive leadership team.

We discussed this move back when it happened and you can find our article here.

So, who is Pann replacing in his new role? The position was originally held by Randhir Thakur who took up the role in March 2021 according to this press release from Intel

Intel CEO Pat Gelsinger introduced the formation of Intel Foundry Services, a new business that will service the growing global demand for semiconductors. This standalone unit will have its own p & l, and therefore be fully invested in its customers' success. The new business unit will be led by Randhir Thakur, who will report directly to Gelsinger. Intel Foundry Services will build capacity in both the United States and the European Union to serve a global market.

Then, in November 2022, it was rumoured that Thakur was stepping down from his role as foundry chief, but that he would stay on until Q1 2023. This was later confirmed by Intel:

Randhir Thakur, senior vice president and president of Intel Foundry Services, "has decided to pursue other opportunities" but will continue to lead the business unit through the first quarter of 2023 to "ensure a smooth transition to a new leader," Intel CEO Pat Gelsinger said in an email to employees Monday that was seen by El Reg.

We discussed this development in this article where we noted the following:

Mr Gelsinger rolled out his Intel Foundry Services (IFS) plan as part of his IDM 2.0 strategy back in March 2021, naming Dr. Thakur as its head, reporting directly to himself. As a critically important leg in his IDM 2.0 strategy, why would Mr. Gelsinger appoint someone to lead IFS on a temporary basis, for eighteen months? Furthermore, if the plan was to wait for Russell Ellwanger to come on board, those plans may be on shaky ground according to this article by Fabricated Knowledge

Intel's turnaround under Gelsinger is at a critical juncture. Having a senior executive leader announcing that he's quitting eighteen months into a critical role is a really bad look.

So, who exactly is Russell Ellwanger and what does this latest development tell us about Intel’s plans to acquire Tower Semi? We think it tells us quite a lot, actually.