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Pat Gelsinger will step down as chief executive of Intel, deepening the crisis at the once-dominant US chipmaker, which has fallen behind rivals such as Nvidia.
The California-based company said Monday that the 63-year-old will be replaced by Chief Financial Officer David Zinsner and Executive Vice President Michelle Johnston Holthaus, who will serve as interim CEOs pending a permanent appointment.
Gelsinger described the decision as “bittersweet,” adding that it had been “a challenging year for all of us as we made difficult but necessary decisions to position Intel for the current market dynamics.”
Appointed CEO in 2021, Gelsinger was more than three years into his five-year plan to turn Intel into a chip-making powerhouse that would rival Taiwan Semiconductor Manufacturing Company.
Under his leadership, the group announced plans to build new factories in the US and Europe, sought to catch up with the most advanced manufacturing processes and separated the company’s chip design business from its manufacturing arm.
But the strategy was under increasing pressure, and the company was rocked by executive departures, thousands of layoffs and a falling stock price.
Over the past year, Intel’s stock price has fallen more than 40 percent, falling to a market capitalization of just over $103.7 billion. By contrast, shares of Nvidia, which has cornered the market for high-end AI chips, have risen more than 200 percent over the same period, reaching a market capitalization of $3.35 billion.
Intel’s share price jumped nearly 4 percent in premarket trading following the news of Gelsinger’s retirement.
In October, Intel announced $18.7 billion in restructuring charges and asset writedowns in its latest attempt to restore its competitiveness.
The charges included $2.8 billion in costs related to a previously announced reorganization and cost-cutting program designed to cut spending by $10 billion a year. Intel also took $15.9 billion in equipment impairment charges and goodwill write-offs.
Attention has recently focused on Gelsinger’s relationship with his board, from which Lip-Bu Tan resigned in August. The former CEO of chip design software company Cadence was tasked with overseeing key chip manufacturing strategy.
As part of the changes announced Monday, Johnston Holthaus will take on the newly created position of CEO of Intel Products, the unit that encompasses its AI, data center and client computing groups.
Frank Yeary, who has been the independent chairman of Intel’s board but will become interim executive chairman while it searches for a new CEO, added: “While we have made significant progress in regaining manufacturing competitiveness and building our ability to be a world-class foundry, we know we still have much work in the company and we are committed to restoring the confidence of investors.
“As a board, we know first and foremost that we have to put our product group at the center of everything we do,” he said. “Our customers demand it from us, and we will deliver.”
