Intel announced that CEO Pat Gelsinger will retire from the company's board of directors effective December 1.
Intel executives David Zinsner and Michelle Johnston Holthaus have been named interim co-CEOs. Mr. Zinsner is Intel's CFO and Mr. Holthaus is GM of Intel's Client Computing Group.
Mr. Holthaus has also been named to the newly created CEO position of Intel's product division, which spans the chipmaker's consumer-focused organization and data center, AI, network and edge businesses.
Frank Yeary, independent chairman of Intel's board of directors, will serve as interim executive chairman during the transition period. Intel said its leadership of Intel Foundry, its chip design and manufacturing division, will remain unchanged and that Intel's board of directors has established a search committee to find Gelsinger's permanent successor.
“It has been the honor of my life to lead Intel,” Gelsinger said in a statement. “This group of people is some of the brightest and brightest in the industry, and I am honored to call each and every one of them my colleagues.” said. “This company has been the center of my life for most of my career, so today is of course a bittersweet day. I can look back with pride at all we have achieved together. This year has been challenging for all of us around the world, as we have made tough but necessary decisions to position Intel for market trends. I am forever grateful.”
According to Bloomberg, Intel's board gave Gelsinger the option to step down or be fired.
Mr. Gelsinger first joined Intel at the age of 18 after earning an associate's degree from Lincoln Institute of Technology. He was the lead architect of Intel's fourth generation 80486 processor, introduced in 1989. At the age of 32, he was appointed the youngest vice president in the company's history.
Mr. Gelsinger became Intel's CTO in 2001 and led key technology developments including Wi-Fi, USB, and the Intel Core and Xeon chip lines. He left the company in 2009 to join EMC as president and CFO and was named CEO of VMware in 2012.
Gelsinger returned to Intel as CEO in 2021 as the company faced increasing pressure from activist investors to restructure. He began an ambitious five-year course correction by greenlighting the construction of massive multibillion-dollar semiconductor manufacturing plants in the U.S. and abroad to catch up with chip giants like TSMC and Samsung. .
Gelsinger also lobbied Congress to subsidize semiconductor manufacturing in the state. In November, the U.S. Department of Commerce awarded Intel up to $7.86 billion in grants through the CHIPS Act, a funding bill to advance Intel's commercial semiconductor efforts in Arizona, New Mexico, Ohio, and Oregon. Ta.
But Mr. Gelsinger has stumbled during his recent tenure and struggled to deliver on his promises.
Gelsinger reportedly angered TSMC by criticizing the rocky relationship between Taiwan and China, which caused Intel to lose important discounts from the chipmaker. He was overly optimistic about the ability of Intel's AI chips, such as Gaudi, to compete with products from incumbents such as Nvidia. And his efforts to turn Intel into a chipmaker for other companies ran into technical problems.
By early 2022, Intel's revenue from PC chips had fallen 25%, and the company had ceded valuable data center chip land to rival AMD. That same year, a deal to supply chips to Waymo, Alphabet's self-driving car division, collapsed. Also that year, Intel lost out to Sony, another strong potential customer for the next-generation PlayStation.
In 2023, Intel's $5.4 billion acquisition of Israeli company Tower Semiconductor failed. Regulatory hurdles invalidated the offer, forcing Intel to pay a $353 million termination fee.
Intel's 18A chip manufacturing process, intended to provide the company with major new business, became a liability after failing to meet reliability expectations. Apple and Qualcomm have reportedly passed on 18A, and Intel is not expected to start mass production of 18A chips until 2026.
In early fall, Intel took steps to separate its foundry business into an independent subsidiary. This is a move long sought by shareholders, and the company announced new customer acquisitions including AWS (which plans to use Intel's 18A process) and the Department of Defense.
But it was a case of too little, too late.
Intel's revenue shrank to $54 billion in 2023, about a third less than the year Gelsinger took over. The company cut its dividend, pledged to restructure and cut more than 15,000 jobs in a $10 billion cost-cutting plan, and suspended or postponed construction of several semiconductor manufacturing facilities.
In October, Intel reported a quarterly loss of $16.6 billion, the largest in the company's 56-year history. And analysts expect the company to lose $3.68 billion this year, marking its first annual net loss since 1986.
Intel continues to face challenges. The company's latest consumer processors were snubbed, entrepreneur Lip Vu Tan resigned from the company's board, and Intel was left without a board member with semiconductor expertise.
To turn things around, Intel is said to be considering selling its self-driving division Mobileye and its enterprise networking division. Suitors including Qualcomm are reportedly approaching the company with takeover offers.
Intel stock rose as much as 2.66% on news of Gelsinger's resignation.
“With Dave and MJ's leadership, we will continue to move quickly on our priorities: simplifying and strengthening our product portfolio and increasing our manufacturing and foundry capabilities while optimizing operating expenses and capital. ” Yearly said in a press release. “We are working to build a leaner, simpler, and more agile Intel.”