Pat Gelsinger, CEO of Intel, has announced his retirement, leaving the company amidst financial struggles and a shifting technological landscape. Gelsinger, who began his Intel career in 1979 at the age of 18, will be temporarily replaced by interim co-CEOs David Zinsner and Michelle Johnston Holthaus while the board searches for a permanent successor.
Gelsinger’s return to Intel as CEO in early 2021 was marked by ambitious goals. He aimed to revitalize Intel’s desktop processor market share against AMD and accelerate the company’s manufacturing timeline to compete with international giants like TSMC. His leadership saw advancements, notably with the 12th generation of processors, which marked a significant performance improvement. He also spearheaded an aggressive foundry roadmap, pushing for smaller nodes in U.S.-based plants.
Despite these efforts, Intel continues to face significant financial challenges. While pushing an ambitious manufacturing timeline, the company has outsourced production of its latest Lunar Lake and Arrow Lake CPUs to TSMC. These chips, as seen in reviews like the Core Ultra 9 285K, have struggled to perform competitively.
This outsourcing wasn’t an isolated incident. Despite Gelsinger’s strategic changes, Intel’s financial recovery has been slow. The company recently reported losses of $16.6 billion, a stark contrast to the record revenues seen by competitors Nvidia and AMD, who have capitalized on the booming AI hardware market.
Adding to Intel’s woes, the company faces a shareholder lawsuit filed in August alleging securities fraud and has significantly reduced its workforce, laying off 15,000 employees – 15% of its total staff – this year.
A key element of Intel’s turnaround strategy hinges on the 2022 U.S. CHIPS Act. The company has been granted nearly $30 billion through direct funding and low-interest loans. The first round of funding, totaling $7.86 billion, was announced recently and primarily targets Intel’s foundry business.
This investment focuses on Intel’s developing 18A node, which has secured contracts with Microsoft and the U.S. Department of Defense. However, Intel was forced to cancel its 20A node and outsource production of Lunar Lake and Arrow Lake to TSMC. Furthermore, reports suggest the Biden administration has encouraged Intel to consider selling its chip design business to a competitor, such as AMD.
Gelsinger’s departure comes just days before the anticipated reveal of Intel’s next-generation Battlemage GPUs, the second generation of its desktop graphics cards, aimed at budget-conscious gamers.
This retirement marks a pivotal moment for Intel. The company stands at a crossroads, navigating financial pressures, competitive challenges, and the complexities of the evolving semiconductor market. The future direction of Intel, and its ability to regain its footing in the industry, remains to be seen.
