SAN FRANCISCO--Intel Chief Executive Pat Gelsinger has been forced out less than four years after taking the helm of the company, handing control to two lieutenants as the faltering American chipmaking icon searches for a permanent replacement.
Gelsinger, who resigned on Dec. 1, left after a board meeting last week during which directors felt Gelsinger's costly and ambitious plan to turn Intel around was not working and the progress of change was not fast enough, according to a person familiar with the matter. The board told Gelsinger he could retire or be removed, and he chose to step down, according to the source.
His departure comes well before the completion of his four-year roadmap to restore the company's lead in making the fastest and smallest computer chips, a crown it lost to Taiwan Semiconductor Manufacturing Co, which makes chips for Intel rivals such as Nvidia. Under Gelsinger, Intel, which was founded in 1968 and for decades formed the bedrock of Silicon Valley's global dominance in chips, has withered to a market value more than 30 times smaller than Nvidia, the leader in artificial intelligence chips.
Gelsinger in 2021 inherited a company rife with challenges that he compounded. Setting lofty ambitions for manufacturing and AI capabilities among major clients, Intel ultimately lost or cancelled contracts under his watch, and was unable to deliver the promised goods, according to a Reuters special report in October. He made optimistic claims about prospective AI-chip deals that exceeded Intel’s own estimates, leading the company to scrap a recent revenue forecast about a month ago.
Bloomberg earlier reported on the circumstances surrounding Gelsinger's retirement.
Gelsinger, 63, has assured both investors and U.S. officials, who are subsidizing Intel's turnaround, that his manufacturing plans remain on track. But the full results will not be known until next year, when the company aims to bring a flagship laptop chip back into its own factories.
Shares of the company fell 0.5%. The stock has lost more than half of its value this year, and it was replaced last month by Nvidia on the blue-chip Dow Jones Industrial Average indexI. Rival Advanced Micro Devices climbed 3.6%, as the PHLX Semiconductor Index rose 2.6%.
The company named Chief Financial Officer David Zinsner and senior executive Michelle Johnston Holthaus as interim co-chief executive officers while its board conducted a search for a new CEO. The moves come less than a week after U.S. officials gave $7.86 billion in subsidies to Intel.
The board has formed a search committee for Gelsinger's successor."While we have made significant progress in regaining manufacturing competitiveness and building the capabilities to be a world-class foundry, we know that we have much more work to do at the company and are committed to restoring investor confidence," Frank Yeary, independent chair of the board, said in a release.
Intel's communications chief, Karen Kahn, is also planning to leave the company, according to two people with knowledge of the situation.
