Intel CEO Pat Gelsinger exits amid reported board frustration
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The news: Intel CEO Pat Gelsinger abruptly stepped down, effective immediately, after the board reportedly lost confidence in his plans to turn around the iconic chipmaker, ending a nearly four-year run that saw Intel fall behind rivals in building semiconductors to power the artificial intelligence boom.
Gelsinger, who had been CEO since taking the reins from Bob Swan in February 2021, will be replaced by CFO David Zinsner and Products CEO Michelle Johnston Holthaus as interim co-CEOs, the company said.
The company formed a search committee to find a permanent successor to Gelsinger.
The context: Gelsinger began his career in 1979 at Intel, before departing in 2009, leading VMware and returning to the California-based chipmaker in 2021.
Gelsinger’s turnaround plan for the company focused on regaining Intel’s manufacturing lead from rivals like Taiwan’s TSMC, expanding into contract chipmaking, and investing heavily in new factories.
But his tenure was marked by delays in manufacturing plans, lost ground to Nvidia in AI chips, a reliance on government subsidies to fund factory expansions, USD7 billion in chipmaking losses in 2023, and a 60% decline in the value of its share price.
The board, reportedly frustrated with Gelsinger’s progress in narrowing the gap with competitors and regaining market share, gave him the option to retire or be removed, Bloomberg reported, citing unnamed sources familiar with the matter.
What they said: “Today is, of course, bittersweet as this company has been my life for the bulk of my working career. I can look back with pride at all that we have accomplished together. It has been a challenging year for all of us as we have made tough but necessary decisions to position Intel for the current market dynamics. I am forever grateful for the many colleagues around the world who I have worked with as part of the Intel family,” Gelsinger said in a statement.
“Leading Intel has been the honor of my lifetime – this group of people is among the best and the brightest in the business, and I’m honored to call each and every one a colleague.”
Frank Yeary, independent chair of Intel's board, said the leadership knows “that we have much more work to do at the company and are committed to restoring investor confidence.”
“As a board, we know first and foremost that we must put our product group at the center of all we do. Our customers demand this from us, and we will deliver for them,” Yeary added.
Ryan Detrick, chief market strategist at Carson Group said: “The stock lost more than 60% under his tenure, so this shouldn’t have come as a very big surprise. New leadership is needed to turn things around and it is safe to say that any of his major strategic decisions are on the chopping board, including the move to focus on being a contract manufacturer.”
The sources: Intel announcement, Reuters, Bloomberg
