(Reuters) - Struggling U.S. chipmaker Intel ( INTC ) on Wednesday named former board member Lip-Bu Tan as its CEO effective on March 18, more than two months after it ousted company veteran Pat Gelsinger.

Tan, a respected semiconductor industry veteran, has long been seen as a CEO contender. He was approached by Intel's ( INTC ) board in December, Reuters had reported, to gauge his interest in taking up the job.

Shares of the company rose 11% in extended trading.

Intel ( INTC ) is undergoing a historic transition as it attempts to emerge from one of its bleakest periods. While struggling to cash in on a boom in investment in advanced AI chips, the company is spending heavily to become a contract manufacturer of chips for other companies, leading some investors to worry about pressure on its cash flows.

Tan, who formerly led chip design software maker Cadence Design Systems ( CDNS ), left Intel's ( INTC ) board last year over disagreements on how to turn around the company. Tan felt Intel ( INTC ) had too many layers of middle management and that the chip contract manufacturing effort was insufficiently customer-centric, Reuters previously reported.

The most consequential decision faced by Tan will be whether to keep Intel's ( INTC ) chip design and manufacturing operations together or split them apart. Reuters reported that Intel ( INTC ) rival Taiwan Semiconductor Manufacturing ( TSM ) has approached some of Intel's ( INTC ) biggest potential manufacturing customers about forming a joint venture to operate Intel's ( INTC ) factories.