After 4 years leading the chip race, and more than 40 years of experience in the technology market, the giant Intel falls from the top. Pat Gelsinger resigned as CEO of the company; The official announcement speaks of a “retirement.” The decision comes at a particularly delicate time for the company, which under his leadership faced difficulties in terms of revenue and market share.
Gelsinger will be replaced on an interim basis by David Zinsner, Intel’s current CFO, and Michelle Johnston Holthaus, head of Intel’s product division. Frank Yeary, independent chairman of the board, will also assume the role of interim chief executive during the transition period. Intel’s challenge will be to find a new exponent capable of getting it out of difficulties.
The Gelsinger era at Intel
Gelsinger began his career at Intel in the 1980s, notably as chief architect of the fourth-generation Intel 80486 processor, released in 1989. In 2001 he became chief technology officer, contributing to the development of key technologies such as Wi-Fi, USB, and Intel Core and Xeon processor families. After leaving the company for a few years in 2009, he was called back as CEO in 2021, with the specific task of stabilizing the company and relaunching it after a difficult period.
During his tenure, he outlined ambitious plans to invest and build new production facilities, aiming to catch up with Asian competitors, particularly Taiwan Semiconductor Manufacturing Company Limited (TSMC) and Samsung. Among his initiatives was to pressure the US Congress to subsidize domestic chip production. Thanks to the Chip Act, the Department of Commerce allocated Intel up to $7.86 billion to promote semiconductor production.
Despite constant efforts, Gelsinger did not achieve its goals: the company’s results were disappointing, with a 25% drop in revenue from PC chips in 2022 and a loss of market share in data centers in favor of Advanced Micro Devices (AMD), a major US competitor. The deep crisis phase for Intel could culminate in record losses that analysts estimate at $3.68 billion by the end of 2024. According to Bloomberg, the situation led Gelsinger to a crossroads: leave or be fired.
The critical situation dragged the company into a risky restructuring plan that includes cutting 15% of jobs and a $10 billion cost containment program. Furthermore, in September 2024, rumors emerged about a possible acquisition attempt by competitor Qualcomm.
In an interview with WIRED, Pat Gelsinger assures that Intel’s renewed investment in cutting-edge technology for the manufacture of AI chips will allow them to become one of the main suppliers. Microsoft is already its main client.
The future of the company
The Zinsner and Holthaus duo will face complex challenges to return Intel to the path of profitability. At the same time, the council has already begun the search for Gelsinger’s successor: “With the leadership of Dave and Michelle, we will continue to act with urgency on our priorities,” stressed Frank Yeary, president of the council. These priorities include simplifying and strengthening the company’s product portfolio, advancing manufacturing and foundry capabilities, while optimizing opex and capital expenditures. “The goal is for Intel to be more agile, simple and efficient,” concludes Yeary.
Article originally published in WIRED Italy. Adapted by Alondra Flores.
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