Pat Gelsinger Steps Down as CEO of Intel

Pat Gelsinger stepped down from his position as CEO of Intel on Dec. 1 and resigned from his position on the board of directors. David Zinsner, CFO, and Michelle Johnston Holthaus, Vice President and General Manager of Intel’s Client Computing Group, will assume leadership as interim co-CEOs while the company searches for a permanent successor. 

"Leading Intel has been the honor of a lifetime; this group of people is among the best and brightest in the industry," Gelsinger said in his farewell remarks. "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."

Since his return in 2021 from VMware, Gelsinger sought to revitalize a company facing critical challenges, such as the loss of leadership in semiconductor manufacturing to competitors such as Taiwan Semiconductor Manufacturing Company (TSMC).

His vision to capitalize on supply chains, using them as a new geopolitical axis, was an important aspect of his tenure. Gelsinger promoted the creation of new plants in the United States and promoted investment in advanced semiconductor packaging technologies, which provide an efficient and cost-effective way to connect multiple complex chips, a common problem in their production.

Despite its efforts to position Intel as a leader in third-party chip manufacturing, the company faced the difficulties of operating in a highly competitive and constantly changing environment, led by major players such as NVIDIA, Samsung, or the TSMC.

This, coupled with a 33.69% drop in the value of its shares over the last year (restated to Dec. 2, 2024), reflects the financial pressure Intel has been under during Gelsinger's tenure.

Key Initiatives

Gelsinger's legacy includes a number of development investments and dramatic initiatives taken during his tenure, most notably his commitment to the CHIPS for America Act initiative and his plan to save up to US$10 billion in additional costs, as previously reported by MBN.

The CHIPS for America Act, which seeks to guarantee US technological sovereignty by creating a semiconductor manufacturing infrastructure within the country, aims to position Intel as a strategic ally for the US government when it comes to local chip production.

In November 2024, Intel received US$7.87 billion in federal funding to advance its manufacturing projects in Arizona, New Mexico, Ohio, and Oregon by enhancing advanced chip assembly capabilities. These funds are part of Intel’s larger efforts to increase its chip production capabilities through a total investment of US$100 million.

As for its cost savings plan, Gelsinger stated that the company needed to align its cost structure in line with its new operating model by "fundamentally" changing the way it operates.

"Our revenues have not grown as we had hoped, and we have not yet fully benefited from powerful trends, such as AI. Our costs are too high and our margins too low," Gelsinger wrote.

This cost-savings plan led Intel to stop all "non-core" work and cut 15% of its global workforce, laying off 15,000 employees.

"We need bolder actions to address these issues, especially given our more challenging than expected financial results and outlook for the second half of 2024," Gelsinger said in a letter to employees.

Intel now faces a potential acquisition by Qualcomm, which wants to acquire the company to strengthen its chip manufacturing capabilities and reduce its reliance on third parties such as TSMC and Samsung.

"If the acquisition materializes, it could represent one of the largest mergers in the technology industry, although it would also face intense regulatory scrutiny, both in terms of national security and antitrust, due to both companies' business ties with China," reads an Expansion article on the subject.

Intel's Future

Gelsinger's departure not only marks the end of an era, but also highlights the challenges the company faces. 

The appointment of Zinsner and Holthaus as interim co-CEOs reflects the importance given by Intel's board for operational and financial expertise at this transitional stage. Zinsner has been Intel's CFO since 2022, and has a track record in the semiconductor industry. Holthaus has been a key figure at Intel for two decades and has led the Intel Products division.

"With the leadership of Dave [Zinsner] and MJ [Holthaus], we will continue to act with urgency on our priorities: simplifying and strengthening our product portfolio and enhancing our manufacturing and foundry capabilities, while optimizing our operating and capital expenditures," says Frank Yeary, independent chair of the board of Intel in a press release. "We are working to create a leaner, simpler, and more agile Intel.