Pat Gelsinger has stepped down as CEO of Intel Corporation, the company announced today.
His resignation, which also includes stepping down from his seat on Intel’s board, follows a meeting with the company’s board of directors. Sources told Bloomberg that the meeting, focused on Intel’s efforts to regain market share and compete with Nvidia, ended with Gelsinger being given the choice of retirement or removal.
Gelsinger’s career with Intel began in 1979, where he played a key role in developing several processors and served as the company’s chief technical officer. After leaving in 2009, Gelsinger led VMware for nearly a decade before returning to Intel as CEO in 2021.
Intel has named MJ Holthaus and David Zinsner as interim co-CEOs. Holthaus, who was previously in charge of Intel’s Client Computing Group, will now lead the Intel Products business, which includes the Data Center and AI Group, Network and Edge Group, and Client Computing Group. Zinsner, who joined Intel in 2022 from Micron Technology, will serve as co-CEO after previously holding the role of CFO.
Intel also confirmed that its leadership team will remain unchanged, with Frank Yeary, the independent chair of Intel’s board, stepping in as interim executive chair during the transition.
The shakeup at Intel comes as the company faces significant challenges. In recent years, Intel has lost market share to rivals in the personal computer and server markets, which are its primary revenue sources. Additionally, Intel’s efforts to grow its foundry business, which manufactures processors for other companies, have not yet gained significant momentum.
“Pat stepping down presents an opportunity for Intel to face the hard truth: without virtually unlimited capital, its current strategy could bankrupt the company,” commented Dave Vellante, Chief Analyst at TheCUBE Research. “As we’ve said for years, it’s long past time to spin off the Foundry business.”
Under Gelsinger’s leadership, Intel made substantial investments to expand its U.S. manufacturing capabilities. This included a $30 billion upgrade to its Arizona facility and a $20 billion commitment to building two new fabs in Ohio. Earlier this year, Intel also announced a $36 billion expansion plan for its Oregon manufacturing site.
In parallel, Intel launched an ambitious project to upgrade its chip manufacturing processes, aiming to deploy five new nodes in four years to catch up with rivals like Taiwan Semiconductor Manufacturing Co. While Intel’s engineers have made significant progress, including reaching important milestones for the Intel 18A node, challenges persist. Broadcom, a potential customer for the new process, has reportedly determined that the technology is not yet ready for mass production.
Intel has also struggled to balance its large investments with its financial performance. In August, the company saw its stock price drop by 50% after quarterly results fell short of expectations. To address this, Intel announced a cost-cutting plan that will involve laying off about 15% of its workforce to save $10 billion annually.
“We have made significant progress in regaining manufacturing competitiveness and building the capabilities to be a world-class foundry, but we still have much work ahead,” Yeary stated. “With Dave and MJ’s leadership, we will continue to focus on our priorities: simplifying and strengthening our product portfolio, advancing our manufacturing and foundry capabilities, and optimizing our operating expenses and capital.”
