Intel’s CEO, Pat Gelsinger, has stepped down after nearly four years of trying to steer the company back to the top of the chipmaking industry. His resignation took effect on December 1. The board has appointed CFO David Zinsner and executive vice president Michelle Johnston Holthaus as interim co-CEOs. Holthaus will oversee not only the Client Computing Group but also Intel’s Data Center, AI, and Network and Edge divisions.
The board expressed gratitude for Gelsinger’s long service and commitment to Intel. However, his tenure faced significant challenges, especially following a disappointing earnings report on August 1 that revealed hefty losses and lowered revenue projections. In a bid to cut costs, Intel suspended its dividends—something it hadn’t done in over 30 years—and laid off 15% of its workforce, which totals around 110,000 employees. Under Gelsinger’s leadership, Intel’s stock has plummeted more than 50%.
Frank Yeary, the independent board chair, acknowledged some progress in manufacturing competitiveness but also highlighted the need for more work to restore investor trust. Gelsinger himself remarked on the bittersweet nature of his departure, reflecting on the tough but necessary decisions made to adapt to shifting market conditions.
Gelsinger joined Intel as an engineer and spent 30 years at the company, eventually becoming its first CTO. After leaving in 2009, he led VMware for 12 years before returning in 2021 to revitalize Intel’s position in the semiconductor sector. He aimed to open Intel’s foundries to all chip designers, including competitors—a bold vision. However, industry experts noted that the turnaround wasn’t swift enough. Analyst Jack Gold pointed out that the board allowed Gelsinger sufficient time to effect change, but results didn’t materialize.
Throughout his time at Intel, Gelsinger championed the Chips and Science Act, which ultimately secured $7.9 billion in federal grants—though this was less than the initial expectation. Still, these funds could lead to more financial support if Intel meets certain benchmarks.
The semiconductor landscape has transformed significantly. Competitors like Nvidia, which evolved from a niche GPU manufacturer to a leader in the AI chip market, now boast a market cap exceeding $3 trillion. Meanwhile, AMD has outperformed Intel in AI, capturing market share with its Instinct AI accelerator, while Intel’s Gaudi chip has struggled.
This competition has cost Intel dearly, particularly in its data center business, which analysts say could be a major growth area if revitalized. The new CEO will need experience in the chip industry and a proven history of turning around struggling companies. This leader will also need to continue with Gelsinger’s strategy to leverage Intel’s foundries, which once made the company a powerhouse in semiconductor production.
Right now, Taiwan Semiconductor Manufacturing Company holds the title of the largest semiconductor contract manufacturer globally, a position Intel once dominated. As analyst Gold points out, the synergy between product engineering and foundry operations fueled Intel’s past successes—something that needs to be reignited.