Intel (NASDAQ:INTC) CEO Pat Gelsinger has resigned, drawing a line under a challenging tenure that saw the once-dominant chipmaker struggle to keep pace with its rivals in a rapidly evolving technology landscape.
Intel’s transition into manufacturing processors for competitors like Apple (NASDAQ:AAPL), a move central to revitalising US-based chip production, has faced setbacks.
The company recently saw an $8.5 billion CHIPS Act grant cut to $7.86 billion due to delays in plant construction and investment timelines.
Fierce competition
Gelsinger, who rejoined Intel in February 2021 after leading VMware, was tasked with turning around the company amid fierce competition, production delays and missed opportunities in the artificial intelligence (AI) revolution.
Under Gelsinger’s stewardship, Intel’s stock plummeted by 61% and its influence in the semiconductor industry also declined.
The company’s inability to capitalise on the AI wave contrasted with competitors such as Nvidia, now valued at $3.4 trillion, which has emerged as a global leader by focusing on chips tailored for AI-driven data centres.
In stark contrast, Intel’s $104 billion market value underscores its diminished position in the tech hierarchy.
Intel recently announced layoffs impacting 15% of its workforce as part of a cost-cutting strategy aimed at saving $10 billion.
Despite these efforts, the company remains at a crossroads, with questions looming over its ability to compete and speculation about potential acquisition by rivals like Qualcomm (NASDAQ:QCOM).
Strategic challenges for new leadership
Gelsinger’s resignation, effective December 1, paves the way for interim co-CEOs David Zinsner, Intel’s chief financial officer, and Michelle Johnston Holthaus, general manager of its client computing group.
Holthaus will also lead a new division overseeing Intel’s data centre and AI product initiatives, to help it try to catch up with its big competitors.
The leadership team will focus on simplifying Intel’s product portfolio, advancing its manufacturing capabilities and addressing the company’s operational inefficiencies.