Intel chief Pat Gelsinger to quit with US chipmaker in crisis

Pat Gelsinger is to stand down as Intel chief executive, deepening the crisis at the once-dominant US chipmaking throng, which has fallen behind rivals such as Nvidia.

The California-based business said on Monday that the 63-year-ancient would be replaced by chief financial officer David Zinsner and executive vice-president Michelle Johnston Holthaus, who will be interim CEOs until a permanent appointment is made.

Gelsinger described the selection as “bittersweet”, adding that it had been “a challenging year for all of us as we have made tough but essential decisions to position Intel for the current trade dynamics”.

Appointed chief executive in 2021, Gelsinger was more than three years into his five-year schedule to turn Intel into a chipmaking powerhouse to rival Taiwan Semiconductor Manufacturing business.

Under his path, the throng announced plans to construct recent factories in the US and Europe, sought to catch up with the most advanced manufacturing processes, and separated the business’s chip design business from its manufacturing arm.

But the way had arrive under increasing pressure, with the business rocked by the departures of executives, thousands of lay-offs and a plunging distribute worth.

Over the history year, Intel’s distribute worth has dropped more than 40 per cent, falling to a trade capitalisation of just over $103.7bn. By contrast, shares in Nvidia, which has cornered the trade for cutting-edge AI chips, have risen more than 200 per cent over the same period, reaching a trade cap of $3.35tn.

Intel’s distribute worth jumped almost 4 per cent in pre-trade market activity following the information of Gelsinger’s retirement fund.

In October, Intel announced $18.7bn in restructuring and resource impairment charges in its latest attempt to rebuild its competitiveness.

The charges included $2.8bn of outgoings tied to a previously announced reorganisation and expense-cutting programme designed to cut spending by $10bn a year. Intel also took $15.9bn of impairment charges on equipment and goodwill writedowns.

Attention had recently turned to Gelsinger’s connection with his board, from which Lip-Bu Tan resigned in August. The former chief executive of chip design software business Cadence had been charged with overseeing its crucial chip manufacturing way.

As part of the changes announced on Monday, Johnston Holthaus will receive a newly created position as chief executive of Intel Products, a unit that encompasses its AI, data centre and client computing groups.

Frank Yeary, who was independent chair of Intel’s board but will become interim executive chair as it looks for a recent chief, added: “While we have made significant advancement in regaining manufacturing competitiveness and building the capabilities to be a globe-class foundry, we recognize that we have much more work to do at the business and are committed to restoring investor confidence.

“As a board, we recognize first and foremost that we must put our product throng at the centre of all we do,” he said. “Our customers demand this from us, and we will deliver for them.”