Intel announced that CEO Pat Gelsinger had stepped down. The director, who joined Intel in 1979 at age 18, will be succeeded by David Zinsner and Michelle Johnston Holthaus. Holthaus and Zinsner will serve as interim co-CEOs, and the board will work “vigorously and expeditiously” to find a successor.
Gelsinger took over as CEO in early 2021. At the time, Intel was struggling to reclaim ground lost to AMD in the desktop market and push for more ambitious production schedules to catch up with foreign chipmakers like TSMC. Under Gelsinger’s leadership, the company has made great strides. Intel’s 12th Gen processors marked a key turning point for the company’s desktop processors, with aggressive foundry schedules driving smaller nodes out of US factories.
Nevertheless, Intel is in financial trouble. Despite the aggressive schedule, the company outsourced its latest designs, using Lunar Lake and Arrow Lake CPUs, to TSMC. This wasn’t a one-off generation, either. Gelsinger’s plan changed the company’s direction, but Intel couldn’t turn things around fast enough. In its most recent earnings report, the company reported a loss of $16.6 billion, a figure that took into account record sales from Nvidia and AMD, both of which have made big strides in AI hardware.
As if that wasn’t enough, Intel is also facing a lawsuit filed by investors in August and job cuts. The company has laid off 15,000 employees this year, or 15% of its workforce. A large part of the company’s restructuring efforts appears to rely on the US CHIPS Act of 2022, which provided the company with around $30 billion through direct financing and low-interest loans. Less than a week later, Intel announced a $7.86 billion funding round under the act, marking the company’s first round of funding.
The investment primarily targets Intel’s foundry business. The company’s 18A node is in development and has contracts with companies such as Microsoft and the US Department of Defense. Despite this, Intel had to cancel the 20A node and outsource the production of Lunar Lake and Arrow Lake to TSMC. Additionally, the Biden administration has reportedly encouraged Intel to consider selling its chip design business to a competitor such as AMD.
This news comes just days before Intel is expected to unveil its next-generation Battlemage GPU, the second generation of Intel’s desktop graphics cards aimed at budget-conscious gamers.
