Intel CEO Pat Gelsinger’s run as head of the once illustrious semiconductor company ended over the weekend with the company announcing his unexpected retirement from the business as well as him stepping down from the board of directors.
Gelsinger had been at Intel for roughly 30 years before a brief departure in 2009 and then rejoin the company in 2021 as its replacement for CEO Bob Swan. As part of his CEO mandate, Gelsinger was tasked with taking a chip company that completely missed the mobile market while simultaneously being besieged in the server industry and finding a sustainable business model for the future.
To Gelsinger’s credit, he found a model. Unfortunately, it looks like his execution was a bit lacking for investors.
“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 of Intel
As a board, we know first and foremost that we must put our product group at the center of all we do. Our customers demand this from us, and we will deliver for them … We are ensuring the product group will have the resources needed to deliver for our customers. Ultimately, returning to process leadership is central to product leadership, and we will remain focused on that mission while driving greater efficiency and improved profitability.”
Yearly’s corporation speak of a response acknowledges that Gelsinger’s stated plan of ceding a bit of competitive ground to become the home of all chip making is a strategy worth continued pursuit. However, it seems investors started to wise up to a litany of poor management and execution from Intel’s bread and butter fabrication business as the faulty linchpin to the company’s long-term transition.
Beyond failing to convince it would be partners that their leading competitor would continue to make its own chips while fabricating theirs with no conflict of interests, Gelsinger seemed to also be put in front of the investor firing squad and made to answer for string of failed business moves in the last handful of years.
Over the past couple of years, Intel has had to revise its chip manufacturing roadmaps, losing business contracts as long-time business partners who look to competitors for more reliable deliveries or start to bring their chip making business in-house as a cost cutting measure. Intel has also had to explain to investors how they got into class action lawsuits over poorly performant generational chip releases, and how the company fumbled the bag on a reported $33B CHIPS Act contract from the US government recently.
With Gelsinger out, Intel will leverage Frank Yearly as its independent chair of the board alongside interim Co-CEO’s David Zinsner and Michelle (MJ) Johnston Holthaus until the company can find a permanent CEO willing to inherit the mess that Intel has become.
As for Gelsinger, his storied 40-year career is over at Intel for now. Gelsinger kept his farewell to minimum stating, “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. 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.”
It’ll be interesting to see how the next CEO distinguishes themselves from Gelsinger while also attempting to execute the tight rope work of successfully becoming the Foundry destination for the industry.
