Intel announced that CEO Pat Gelsinger has retired, effective December 1, and stepped down from the company’s board of directors.
Intel executives David Zinsner and Michelle Johnston Holthaus have been named as interim CEOs. Zinsner is Intel’s CFO, while Holthaus is GM of Intel’s computer customer group.
Holthaus was also appointed to the newly created role of CEO of Intel Products, a division that includes the consumer-focused chipmaker and its data center, AI, networking, and edge businesses.
Frank Yeary, Intel’s independent chairman of the board, will serve as interim board chairman during the transition. Intel says leadership at Intel Foundry, the chip design and manufacturing division, will remain unchanged, and that Intel’s board has formed a search committee to find Gelsinger’s permanent replacement.
“Leading Intel has been a lifelong honor — this group of people is among the best and brightest in the business, and I’m honored to call everyone a colleague,” Gelsinger said in a statement. “Today is really bitter since this company has been my life for a large part of my working career. I can look back with pride on everything we accomplished together. It has been a challenging year for all of us as we have made difficult but necessary decisions to position Intel for the current market dynamics. I am forever grateful for the many colleagues around the world that I have worked with as part of the Intel family. “
Gelsinger first joined Intel at the age of 18 after receiving an associate’s degree from Lincoln Tech. He was the lead architect of Intel’s fourth generation 80486 processor, introduced in 1989. And at age 32, he was named the youngest VP in the company’s history.
Gelsinger became Intel’s CTO in 2001, leading key technological developments including Wi-Fi, USB, and the Intel Core and Xeon chip lines. In 2009, he left to join EMC as president and CFO, and joined VMware as CEO in 2012.
Gelsinger rejoined Intel as CEO as the company found itself under pressure from activist investors to restructure. He unveiled a five-year restructuring plan, which highlighted the construction of new large, multi-billion-dollar chip plants in the US and overseas and said he wanted Intel to catch up with Taiwanese chipmaker TSMC and Korean chipmaker Samsung by Samsung . at the end of the decade.
Gelsinger also pressured Congress to fund stateside chip production. In November, the US Department of Commerce awarded Intel up to $7.86 billion through a funding bill, the CHIPS Act, to boost Intel’s commercial semiconductor production in Arizona, New Mexico, Ohio, and Oregon.
But Gelsinger often stumbled — and struggled to deliver on his promises.
Gelsinger reportedly angered TSMC by calling out Taiwan’s poor relations with China, which led to Intel losing rebates to the chipmaker. He had high hopes for the ability of Intel’s AI chips, such as Gaudi, to compete against products from competitors such as Nvidia. And his efforts to turn Intel into a chip manufacturer for other companies ran into technical difficulties.
At the beginning of 2022, Intel’s revenue from personal computers fell by 25% in the second quarter of 2022, and it lost sales of chips in data centers to compete with AMD. A deal to supply chips to Waymo, Alphabet’s self-driving car division, fell through. (A few years later, Intel would lose another major potential customer, Sony, after failing to come to an agreement to produce chips for the company’s next PlayStation console.) And Gelsinger announced cuts — and cut his salary.
In 2023, Intel canceled its bid to acquire Israeli company Tower Semiconductor for $5.4 billion over regulatory hurdles, forcing Intel to pay a $353 million termination fee.
The manufacturing process for Intel’s 18A chips – intended to bring major new business to the company – became a liability after it failed to meet reliability requirements. Apple and Qualcomm passed on 18A for technical reasons, and Intel is not expected to start producing 18A chips in high volume until 2026.
In early fall, Intel took steps to turn Intel Foundry into an independent subsidiary – shareholders have been pushing for a long time – as it announced several customer wins, including AWS (which plans to use its 18A process) and the Pentagon.
Intel’s revenue is down to $54 billion by 2023, down nearly a third from the year Gelsinger took over. The company cut dividends, vowed to restructure and cut more than 15,000 jobs in a $10 billion cost-cutting plan, and suspended or delayed the construction of several factories.
Analysts expect Intel to lose $3.68 billion this year, its first annual loss since 1986. The chip maker has reportedly considered selling its mobile arm Mobileye and its business networking division, and suitors including Qualcomm have reportedly spoken to the company about taking it over.
