Intel's chief executive, Pat Gelsinger, has been forced out less than four years after leading the company, handing over two lieutenants as the faltering US chipmaker icon looks for a permanent replacement.
Gelsinger resigned Dec. 1, according to a company statement Monday. The resignations came after a board meeting last week in which directors felt that Gelsinger's expensive and ambitious plan to turn around Intel was not working and that the pace of change was not fast enough, Reuters news agency reported, citing a person familiar with the matter.
The board told Gelsinger he could retire or be removed, and he chose to step down, according to the source.
His departure comes well ahead of the completion of his four-year roadmap to restore the company's lead in making the fastest and smallest computers, a crown lost to Taiwan Semiconductor Manufacturing Co, which makes chips for Intel rivals such as Nvidia.
Under Gelsinger's watch, Intel, which was founded in 1968 and for decades formed the basis of Silicon Valley's global dominance in chips, has withered to a market value 30 times smaller 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 backing Intel's turnaround, that his manufacturing plans remain on track. The full results, however, won't be known until next year, when the company aims to return the flagship laptop chip to its factories.
Temporary replacement
Two company executives, David Zinsner and Michelle Johnston Holthaus, will serve as interim CEOs while the company looks for a replacement for Gelsinger, who has also left the board, Intel said Monday.
Gelsinger started at Intel in 1979 and became its first chief technology officer. He returned to the company as CEO in 2021.
Gelsinger said in a statement that his departure “is bittersweet as this company has been my life for a large part of my working career”.
“I can look back with pride on everything we have achieved together. It's been a challenging year for all of us as we've made difficult but necessary decisions to position Intel in the current market,” he said.
Zinsner is executive vice-president and chief financial officer at Intel. Holthaus was appointed to the newly created role of CEO of Intel Products, which includes the consumer computing, data center and AI groups.
Frank Yeary, Intel's independent chairman of the board, will chair the interim board.
“Pat spent his formative years at Intel, then returned at a critical time for the company in 2021,” Yeary said in a statement. “As a leader, Pat helped launch and innovate the manufacturing process by investing in high-quality semiconductor manufacturing, while working tirelessly to drive innovation throughout the company.”
Gelsinger's departure comes as Intel's financial problems have been piling up. The company posted a loss of $16.6bn and suspended its dividend in the latest quarter. Its shares have fallen nearly 60 percent since he took over as CEO.
Gelsinger announced plans in August to cut 15 percent of Intel's core workforce — about 15,000 jobs — as part of cost-cutting efforts to save $10bn by 2025.
Unlike other competitors, Intel makes chips more than designs them. Under Gelsinger, the company has been working to build its innovation 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 that President Joe Biden's administration has promised to support the construction of American chip foundries and reduce reliance on Asian suppliers, which Washington sees as a security weakness.
After taking over as CEO, Gelsinger unveiled plans to build a $20 billion manufacturing facility in central Ohio and poured billions more into expanding into Europe, where leaders were also worried about leaning on Asia.
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