Pat Gelsinger, Intel’s chief executive officer, has stepped aside from his role with some media reports indicating that he was forced out by board members who no longer had confidence in his plans to turnaround the struggling chipmaker.
It comes following a meeting by Gelsinger with the board last week, where he was given the option to retire or be removed, and chose the former option, reported Bloomberg. He spent more than four decades at the company.
Intel has named Chief Financial Officer David Zinsner and Michelle Johnston Holthaus, general manager of Intel’s client computing group, as interim co-CEOs until a successor to Gelsinger is appointed.
Gelsinger was appointed as CEO three years ago and set out to shift the core strength of Intel from personal computers and server processors into making chips for other companies, a move that would rival that of TSMC and Samsung Electronics.
Part of his revival strategy involved expanding Intel’s factory network, including building a new complex in Ohio, a project for which the company received federal aid.
“Today is, of course, bittersweet as this company has been my life for the bulk of my working career,” said Gelsinger. “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 the start of this year, Intel’s share price has nearly halved. The company now has more than A$77.28 billion of debt and is reliant on securing outside investments to fulfil its plans.
“We know that we have much more work to do at the company and are committed to restoring investor confidence,” said Frank Yeary, who will serve as the independent co-chair of the board.
“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.”
In an effort to turnaround the company, Intel cut costs earlier this year. It laid off about 15,000 employees, suspended dividend payments for the fourth quarter and cut A$15.46 billion in costs for next year.
Intel was believed to have been forced to shake off a takeover offer from Qualcomm, and even had the US government award it up to $7.86 billion (A$12.15 billion) in direct funding through the US Chips and Science Act to advance its commercial semiconductor manufacturing and advanced packaging projects in Arizona, New Mexico, Ohio and Oregon.
However, orders for Intel’s AI accelerator chip, Gaudi, have been weaker than expected and it won’t reach the company’s $500 million (A$760.34 million) revenue target this year.
Its rival, AMD, increased its forecast for a similar product to more than $5 billion (A$7.6 billion), while Nvidia is expected to have revenue of more than $100 billion (A$152.07 billion) from its AI chip unit this year.
