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In a stunning leadership overhaul, Intel (NASDAQ: INTC) announced CEO Pat Gelsinger's abrupt retirement, effective Dec. 1, 2024. After more than four decades with the company, Gelsinger’s departure leaves many questioning whether this is a well-planned transition or a desperate move amid mounting challenges. CFO David Zinsner and newly minted Intel Products CEO Michelle Johnston Holthaus are taking over in an unusual co-CEO arrangement. But is Intel's board splitting leadership out of innovation—or chaos?
While Intel's stock jumped 4% following the announcement, there’s more beneath the surface than a rosy market reaction. Critics are already questioning if this leadership change signals deeper instability, especially as Intel struggles to compete with industry titans like Taiwan Semiconductor (TSM), AMD (AMD), and NVIDIA (NVDA). Intel's foundry business has been bleeding market share, and analysts from KeyBanc Capital Markets are openly speculating that this shake-up might pave the way for Intel to sell off its foundry business entirely.
Holthaus, a three-decade Intel veteran, is now tasked with revitalizing Intel's sluggish product group. While she’s hailed as a strong leader, is this move merely shuffling deck chairs on a sinking ship? Zinsner, who joined in 2022, has yet to prove his mettle in a leadership capacity of this magnitude. Can two leaders from internal ranks truly reverse Intel’s downward trajectory, or is this a case of promoting insiders who are too close to the problems they need to solve?
Adding fuel to the controversy, Intel’s financial situation is far from stable. The company reported a net loss of $0.46 per share in the last quarter, with revenue declining 6.2% year-over-year to $13.28 billion. Its foundry revenue dropped 8%, and Intel is slashing 15% of its workforce in a desperate bid to cut $10 billion in costs. With an eye on downsizing, some see this as a sign Intel is retreating from its ambitions of being a world-class semiconductor powerhouse.
Even the much-lauded CHIPS Act grant of $7.86 billion—down from a previously expected $8.5 billion—feels more like a lifeline than a victory. Critics argue that while Intel trumpets its U.S. manufacturing expansion, it's losing its global edge, and no amount of government funding can reverse poor strategic decisions.
Pat Gelsinger’s exit comes at a critical moment. Despite his lauded return in 2021, his legacy now appears mixed: he steered the company through a turbulent era but leaves behind a business still struggling to reclaim its leadership in the semiconductor space. His departure might be seen as a signal that Intel’s board isn’t confident in the current trajectory, no matter how much progress they claim on the surface.
The big question now: Can Intel claw its way back to relevance, or will this leadership shuffle prove to be the beginning of the end for the once-dominant chipmaker? Time—and the board’s next CEO pick—will tell.