Intel in Turmoil: Pat Gelsinger Resigns Unexpectedly

The business world is astonished by Pat Gelsinger's sudden resignation as CEO of Intel. In a press release published on Monday before trading began, the struggling chip manufacturer announced that Gelsinger, who led the company for nearly four years, will step down from his position and his seat on the board as of December 1st. For the transition, David Zinsner, CFO, and Michelle Johnston Holthaus, CEO of Intel Products, have been appointed as interim co-CEOs while the search for a permanent successor is underway. Interestingly, the company refrained from appointing Gelsinger to an advisory role in the announcement, suggesting that the CEO was rather pushed to resign. Media reports confirmed this impression later that same day. Unsurprisingly, it became clear that the resignation is related to the company's poor stock performance and falling behind competitors. However, it is surprising that Intel decided to act without having already found a permanent successor. Gelsinger's departure comes at a particularly inopportune time for Intel. The company is in the midst of its largest transformation in four decades, a change that Gelsinger himself had on the agenda just a few months ago. While the stock initially rose after the news, it continued to lose ground in trading and fell by 6.1% the following Tuesday. Wall Street analysts expressed skepticism that this drastic leadership change could benefit Intel in the foreseeable future. A key component of Gelsinger's plan was the restructuring of its own foundry to open it up to external customers, similar to what the major competitor TSMC has already successfully implemented. However, the implementation proved difficult: losses in the billions accumulated and it seems that a new CEO might limit this strategy or even spin off the foundry business. The grand ambitions to build Intel's foundry business into the world's number two now threaten to stall and the company's timeline for new facilities has been postponed to beyond 2030. In this regard, Gelsinger's departure likely brings relief to TSMC, the most powerful company in this sector.