Intel Chief Executive Pat Gelsinger was forced out after four years at the company’s helm, handing the reins to two lieutenants as the United States chipmaking icon searches for a permanent replacement.
Gelsinger resigned on Dec. 1, according to a company statement Monday. The resignation came after a board meeting last week where the director felt Gelsinger’s expensive and ambitious plan to turn around Intel was not working and change progress was not fast enough, Reuters news agency reported, citing a person familiar with the matter.
The board told Gelsinger he could retire or be fired, and he decided to step down, sources said.
His departure comes before the company, which lost the crown to Taiwan Semiconductor Manufacturing Co., which makes chips for Intel rivals such as Nvidia, completes his four-year roadmap to restore the company’s lead in making the fastest and smallest computer chips.
Under Gelsinger’s watch, Intel, founded in 1968 and for decades the bedrock of Silicon Valley’s global dominance in chips, has dwindled to a market value 30 times less than Nvidia, the leader in artificial intelligence chips.
Earlier this month, Nvidia replaced Intel in the Dow Jones Industrial Average.
Gelsinger, 63, has assured investors and US officials who are subsidizing Intel’s turnaround that his manufacturing plans are on track. However, the full results won’t be known until next year, when the company aims to bring the key laptop chip back to its factories.
Intermediate replacements
Two of the company’s executives, David Zinsner and Michelle Johnston Holthaus, will serve as interim co-CEOs while the company searches for a replacement for Gelsinger, who has stepped down from the board, Intel said Monday.
Gelsinger started at Intel in 1979 and was its first chief technology officer. He returned to the company as chief executive in 2021.
His departure comes as “this company has been my life for most of my working career,” Gelsinger said in a statement.
“I can look back with pride on all that we have achieved together. It has been a challenging year for all of us as we have taken tough but necessary decisions to position Intel for the current market dynamics,” he said.
Zinsner is executive vice president and chief financial officer at Intel. Holthaus was newly named CEO of Intel Products, which includes the client computing, data center and AI groups.
Frank Yeary, Intel’s independent chairman of the board, will become interim executive chairman.
“Pat spent his formative years at Intel, then returned to the company in 2021 at a critical time,” Yeary said in a statement. “As a leader, Pat helped launch and revitalize process manufacturing by investing in state-of-the-art semiconductor manufacturing, while working tirelessly to drive innovation across the company.”
Gelsinger’s departure comes as Intel’s financial woes mount. The company posted a loss of $16.6bn and halted its dividend in the most recent quarter. Its shares have fallen nearly 60 percent since he took over as CEO.
In August, Gelsinger announced plans to cut 15 percent of Intel’s massive workforce — about 15,000 jobs — as part of cost-cutting efforts to save $10bn by 2025.
Unlike some competitors, Intel designs chips as well as manufactures them. Under Gelsinger, the company has been working to build its foundry business, making semiconductors in the US designed by other firms, in an effort to compete with rivals such as market leader Taiwan Semiconductor Manufacturing Co, or TSMC.
Intel has benefited from tens of billions of dollars since President Joe Biden’s administration pledged to support the construction of US chip foundries and reduce dependence on Asian suppliers, which Washington views as a security weakness.
After taking over as CEO, Gelsinger unveiled plans to build a $20bn chipmaking facility in central Ohio and poured billions into expanding in Europe, where leaders worried about dependence on Asia.
