Intel’s CEO Pat Gelsinger is stepping down, marking the end of a tumultuous tenure focused on revitalizing the company’s competitive edge in the semiconductor industry, the Wall Street Journal reports.
Announced on Monday, Gelsinger’s departure signals a pivotal moment for the tech giant, which continues to struggle with manufacturing setbacks, intense market competition, and declining investor confidence. Intel’s stock price has dropped 61% since Gelsinger’s appointment in early 2021, starkly contrasting the broader market gains during the same period.
Board Chair Frank Yeary described Gelsinger’s departure as a step toward “restoring investor confidence,” though it leaves the company at a critical juncture. Financial Chief David Zinsner and PC chip business leader Michelle Johnston Holthaus will serve as interim co-CEOs while the board searches for a permanent replacement. The transition comes as Intel races to complete its ambitious “five nodes in four years” manufacturing plan, culminating in the upcoming Intel 18A chip production process.
Industry analysts are raising concerns about the leadership change’s timing. Stacy Rasgon of Bernstein noted the abrupt departure suggests potential issues with Intel’s manufacturing roadmap, especially as it strives to catch up with Taiwan Semiconductor Manufacturing Co. (TSMC), a dominant player in the chip-making industry.
Intel’s challenges extend beyond manufacturing. Its foundry business has reported losses exceeding $11 billion in the first nine months of 2024, nearly doubling last year’s figures. Additionally, the company faces declining data center revenues, which have fallen significantly since 2020. Despite initial optimism from a third-quarter revenue beat, Intel is losing market share to competitors like Advanced Micro Devices (AMD) and Nvidia, particularly in high-demand sectors such as artificial intelligence (AI) computing.
While Gelsinger’s exit raises speculation about potential structural changes—such as separating Intel’s product design and foundry businesses—such moves are constrained by US government funding requirements tied to the CHIPS Act, which mandates Intel retain majority ownership of its manufacturing facilities.
Chris Caso of Wolfe Research highlighted the complex nature of Intel’s predicament, noting that while a new strategy could offer hope, the path forward will be difficult regardless of who leads the company.
