Intel CEO Pat Gelsinger is out, stock up 5%

Intel announced Monday that CEO Pat Gelsinger had retired from the company effective Dec. 1, capping a tumultuous nearly four-year leadership tenure at what was once America’s leading semiconductor company but which saw its stock price and market share collapse under his tenure.

Intel CFO David Zinsner and Intel products CEO MJ Holthaus were named interim co-CEOs. Longtime board member Frank Yeary will serve as Intel’s interim executive chair. Shares of Intel were up 5% Monday in pre-market trading.

Yeary, Intel’s longest-serving board member, will now have to preside over yet another CEO search process. Gelsinger had an illustrious career at Intel, rising to become the company’s first chief technical officer at the turn of the century, before he took a senior role at EMC. Gelsinger returned to the company from VMware, where he was CEO, to stabilize Intel in 2021, replacing then-CEO Bob Swan.

“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,” Gelsinger said in a press release.

Gelsinger set out an audacious plan when he arrived in 2021 to transform the languishing company into a chipmaking juggernaut. He sought to achieve parity with the two leading chipmakers, Samsung and Taiwan Semiconductor Manufacturing Company. He pursued big buildouts in the U.S. and around the world, a costly endeavor that weighed heavily on Intel’s free cash flow and increased the company’s debt load.

Investors became increasingly leery of Intel’s prospects, especially as the AI wave buoyed rival Nvidia and left Intel in the dust. The company’s market cap is less than half of what it was in 2021, and briefly crossed beneath $100 billion earlier this year.

Gelsinger’s retirement comes a week after Intel and the CHIPS and Science Act office finalized a $7.86 billion grant, which is slated to fund the company’s factory-building plans.

Intel has been mired in an extended slump due to market share losses in its core businesses and an inability to crack the artificial intelligence market. The company’s stock has fallen 52% year-to-date.

Intel revealed plans in September to turn the company’s foundry business into an independent subsidiary, a move that would enable outside funding options. In August, Intel reported disappointing quarterly results, sparking the sharpest sell-off in 50 years, and said it would lay off more than 15% of its workforce as part of a $10 billion cost-reduction plan. CNBC reported that Intel had engaged advisors to defend itself against activist investors.

In late September, news surfaced that Qualcomm reached out to Intel about a possible takeover.

— CNBC’s Jordan Novet contributed reporting.

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