Intel CEO Pat Gelsinger Retires Amid Financial Struggles, Comeback Plan

The semiconductor giant says Intel CEO Pat Gelsinger retired on Sunday and named two interim co-CEOs. ‘Today is, of course, bittersweet as this company has been my life for the bulk of my working career,’ Gelsinger says in a statement.

Intel announced on Monday that its CEO of nearly four years, Pat Gelsinger, retired the day before, an unexpected development as the semiconductor giant attempts to bounce back from financial struggles and execute on Gelsinger’s ambitious comeback plan.

The Santa Clara, Calif.-based company said its board of directors has named two interim co-CEOs to lead the chipmaker while it searches for Gelsinger’s permanent replacement: CFO David Zinsner and Client Computing Group General Manager Michelle Johnston Holthaus.

Holthaus, who was previously head of Intel’s Sales and Marketing Group, will also serve in the newly created role as CEO of Intel Products, a group that consists of the company’s Client Computing Group, Data Center and AI Group and Network and Edge Group.

In addition, Intel said that Frank Yeary, independent chair of Intel’s board, will become interim executive chair during the company’s leadership position.

“On behalf of the board, I want to thank Pat for his many years of service and dedication to Intel across a long career in technology leadership,” Yeary said in a statement.

“Pat spent his formative years at Intel, then returned at a critical time for the company in 2021. As a leader, Pat helped launch and revitalize process manufacturing by investing in state-of-the-art semiconductor manufacturing, while working tirelessly to drive innovation throughout the company,” he added.

In a statement from Gelsinger, the now-former CEO said, “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.”

“Today is, of course, bittersweet as this company has been my life for the bulk of my working career,” he continued. “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,” he added.

Intel’s stock price was up by more than 2 percent in early trading Monday.

Gelsinger retired from the company less than a week after Intel announced that it will receive up to nearly $8 billion in funding to subsidize new chip manufacturing sites in the U.S. as part of the federal government's U.S. CHIPS and Science Act.

While the subsidies marked a victory for Gelsinger, it was less than the $8.5 billion Intel was originally expecting, and the funding was awarded after the company in August said that it would cut the jobs of 15,000 employees—or 15 percent of its workforce—and more than $10 billion in costs in response to worsening financial conditions.

Investors responded well in late October to Intel’s third-quarter earnings update, where it exceeded expectations thanks to improvements being made at a “measured pace.”

This has all been happening as Intel attempts to enact Gelsinger’s comeback plan, which involves a major expansion of the company’s chip manufacturing capacity and capabilities in the West as well as the revitalization of its contract manufacturing business.

Bob Venero, CEO of Future Tech Enterprise, Fort Lauderdale, Florida, No. 76 on the CRN’s 2024 Solution Provider 500 list, called Gelsinger one of the great leaders in the technology industry.

“Pat accomplished some great things at Intel, but he entered the picture at a time when the world was facing global economic and supply chain challenges,” said Venero, whose company has been an Intel partner for 28 years. “ There were some missteps, but Pat course-corrected and moved forward. Pat has always been a tenacious leader who was a big supporter of the channel.”

An Intel Veteran Who Returned To Save The Company

Intel appointed Gelsinger to replace Bob Swan as Intel’s CEO in January 2021 as the company was attempting to regain technology leadership and recover from manufacturing struggles that resulted in product delays.

At the time, it marked a grand return for Gelsinger, who started his career at Intel and held several top executive roles, including as its first chief technology officer, until he left the company in 2009. He then went to serve as president and COO of EMC, now owned by Dell Technologies, and afterwards as CEO of VMware, now owned by Broadcom, for eight years.

A little more than a month after Gelsinger became Intel’s CEO, he revealed his ambitious comeback plan, which involved a new strategy called IDM 2.0.

An evolution of Intel’s integrated device manufacturing model where it fabricates the chips it designs, IDM 2.0 envisioned the company becoming a major contract chip manufacturer that could take on Asian foundry giants TSMC and Samsung.

This meant Intel would not only have to significantly expand its manufacturing capacity. It would also have to catch up with TSMC and Samsung in advanced chip-making capabilities and then leapfrog them, as Gelsinger set out to do.

“I am confident that we can be the world’s leading semiconductor company in a landscape of tremendous change and set a course for a new era of innovation and technological leadership,” he wrote to employees in February 2021.

Intel Suffers Amid Rising Competition From AMD, Nvidia

However, Intel’s financial performance has suffered at times under Gelsinger's leadership, including in recent quarters, in part because of rising competition in the CPU market from AMD as well as companies designing Arm-based chips such as Amazon Web Services, Ampere Computing and Apple.

Intel has also faced significant competitive pressure from Nvidia, which made early bets on the promise of accelerated computing with investments and acquisitions that allowed it to build out a comprehensive and integrated stack of chips, systems, software and services just in time to massively benefit from the generative AI revolution.

According to a recent CRN analysis, Nvidia could finish its current fiscal year with $128.6 billion in revenue, which would be 64 percent higher than the combined full-year revenues that have been forecasted by Intel and AMD.

In addition, the semiconductor giant had to contend with a cooling market after the COVID-19 pandemic created high demand for PC and server chips.

Intel Foundry Effort Takes Time To Take Off

One of Gelsinger’s most important projects during his tenure was the revitalization of the company’s contract chip manufacturing business, which previously failed to take off.

Called Intel Foundry, the business officially launched in February of this year with the hope of convincing a variety of companies to manufacture chips on its global network of fabrication plants, or fabs for short.

While Intel announced this year that it would manufacture chips designed by Amazon Web Services and Microsoft Azure, contracts with external customers have yet to materialize into meaningful revenue for the company.

To make Intel Foundry an appealing manufacturing option for external chip designers, the semiconductor giant turned the division into an independent subsidiary in September to “give clearer separation and independence” from Intel’s internal chip design business.

Since Gelsinger announced the formation of Intel Foundry in 2021, the division has gone through two major leadership changes.

Kevin O’Buckley, previously an executive at Marvell Technologies, took over from 35-year Intel veteran Stuart Pann as its general manager earlier this year. Pann had only served in the role for a little more than a year after Intel Foundry’s first leader, Randhir Thakur, left in 2023 to become CEO and managing director of Indian tech giant Tata Electronics.

Intel Fast-Forwards With Advanced Chip-Making Capabilities

While Intel Foundry has yet to make significant traction with external customers, the semiconductor giant has been pushing ahead with another key aspect of Gelsinger’s comeback plan: accelerating the release of new advanced chip-making nodes.

This part of the plan seeks to return Intel to what Gelsinger has called “process performance leadership” after it fell behind in advanced capabilities for several years due to major delays with its 10-nanometer and 7nm manufacturing processes.

The acceleration plan called for Intel to introduce five advanced manufacturing nodes in four years following the debut of its 10-nanometer SuperFin process in 2020. Each node would come with a significant increase in performance-per-watt over the previous one.

This would result in the company achieving “performance-per-watt parity” with Asian foundry rivals TSMC and Samsung in 2024 and “process performance leadership” in 2025, Gelsinger promised when he announced the plan in July 2021.

Since then, the company has introduced the first three nodes—called Intel 7, Intel 4 and Intel 3, respectively—over the past three years. Then in September of this year, the company said the fourth node in Gelsinger’s plan, Intel 20A, would no longer go into production so that the company could focus on the fifth node, Intel18A, for 2025.

Intel’s node acceleration plan, combined with its U.S. manufacturing footprint expansion, has been seen as an important part of the U.S. government’s push to improve its domestic supply chain and advanced chip-making capabilities.

“With Intel 3 already in high-volume production and Intel 18A set to follow next year, leading-edge semiconductors are once again being made on American soil,” Gelsinger said last week when Intel’s nearly $8 billion U.S. CHIPS and Science Act funding was finalized.

However, Intel’s efforts to build new chip manufacturing plants elsewhere in the West has faltered, with the company pausing new projects in Europe indefinitely in September after announcing its drive to cut $10 billion in costs the month before.