Intel’s chief executive has been forced out after failing to bring the US microchip company back to prominence, despite billions in promises from Joe Biden’s administration.
Pat Gelsinger, who joined the Silicon Valley icon 45 years ago, said he was retiring with immediate effect, three years after returning to the company with a promise to revive America’s leadership in microchip technology to blow.
Shares rose as much as 4% after his departure was announced.
Mr. Gelsinger stepped aside after Intel’s board lost confidence in his ability to turn the company around, Bloomberg reported. Last week at a meeting he was given the choice to retire or be removed.
Intel has secured almost $8 billion (£6.3 billion) from the US Department of Commerce under Joe Biden’s Chips Act, a massive set of subsidies aimed at bringing cutting-edge chip manufacturing to US shores.
However, the company is struggling to stem billions of dollars in losses after ceding the lead in manufacturing the most advanced processors to Taiwan’s TSMC.
Intel, responsible for inventing the microprocessor, posted a $16.6 billion loss in its most recent quarter after writing off billions it had invested in advanced chip manufacturing.
It is expected to post its first annual loss since 1983, when U.S. chipmakers were hammered by cheaper Japanese competitors.
Mr. Gelsinger, who was Intel’s Chief Technology Officer before leaving the company to lead software company VMware, had returned in 2021 to return Intel to its tech roots. His appointment as CEO came after a period in which the company was criticized for sacrificing investments to pay shareholders huge dividends.
Intel has repeatedly missed technology shifts such as the rise of smartphones, which has seen it cede ground to its British arm, and artificial intelligence, which is dominated by Nvidia.
Nvidia is competing with Apple for the position of the world’s most valuable company.
Mr. Gelsinger tried to revolutionize Intel’s operations to revive its lead, investing billions in new factory projects and outsourcing some production to Asian rivals.
He also loudly expressed concerns about the US losing ground to foreign competitors, vocally seeking subsidies from President Biden.
In addition to US support, Intel has received promises of €10 billion from Germany to build a €30 billion factory there, which is being touted as the country’s largest foreign investment ever.
However, his efforts have yet to bear fruit. Shares are down nearly 50% this year and the company has been mentioned as a potential target for a takeover or split.
Intel has announced plans to cut 15,000 jobs, a sixth of its workforce, and suspend work on its German factory.
Two of Intel’s top executives, David Zinsner and Michelle Johnston Holthaus, will serve as interim CEOs while the board searches for a new leader.
Gelsinger said he had made “difficult but necessary decisions.”
He said: “Leading Intel has been the honor of my life – this group of people are among the best and brightest in the industry, and I am honored to call everyone a colleague.
“Today is of course bittersweet as this company has been my life for most of my career. I can look back with pride on everything we have achieved together. It has been a challenging year for all of us as we made difficult but necessary decisions to position Intel for today’s market dynamics.”
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