Intel CEO Pat Gelsinger has resigned after a period of underperformance during which the company’s stocks fell 53 percent, three years out of his 3.5-year tenure.

CFO David Zinsner and Intel Products CEO Michelle Johnston Holthaus have been named interim co-CEOs.

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Intel’s setbacks under Pat Gelsinger’s leadership 

The leadership change follows significant setbacks, including a failed $5.4 billion acquisition of Tower Semiconductor and technical issues with its 18A manufacturing process, and comes as Intel faces its first projected annual loss since 1986, with analysts forecasting a $3.68 billion loss this year despite receiving a $8 billion CHIPS Act grant.

Intel lost ground to AMD in the data centre business, failed to compete in the AI chip market, and witnessed a 25 percent decline in PC chip revenue under Gelsinger’s leadership.

As part of a $10 billion cost-cutting initiative, the company reduced its workforce by 15 percent and suspended its dividend.

Intel rivals taking the lead

Nvidia and AMD, the company’s rivals, saw their stock prices soar by 28,000 percent and 5,000 percent, respectively, over the last ten years, while Intel’s stock fell 16 percent, making it one of the S&P’s worst-performing stocks within that time frame.

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The resignation of Pat Gelsinger is a turning point for Intel, a business that was formerly known for dominating semiconductors but is currently battling the harsh realities of a rapidly changing digital landscape.

In an environment where Intel’s once-proud lead in process technology had eroded, particularly as the company lagged behind in the shift to smaller, more efficient chip nodes, Gelsinger, who joined the company in 1979 and returned as CEO in 2021 with the goal of restoring its manufacturing prowess, faced an uphill battle.

During his tenure, there were ambitious plans, like the IDM 2.0 strategy, to revive Intel’s manufacturing skills. However, these were overshadowed by execution issues and a failure to quickly convert to the growing AI and cloud computing areas, which have been dominated by rivals like Nvidia.

The industry is keeping a careful eye on Intel as it handles this leadership change to see if the new co-CEOs can guide the business towards innovation in a field where flexibility and foresight are now required rather than just advantages.