The Chip Crisis: Intel's Turbulent Times and Trump's Dilemma

The abruptly announced retirement of Pat Gelsinger as CEO of Intel has caused a stir. After nearly four years with the chip giant, Gelsinger is stepping down, seemingly involuntarily, as no permanent successor has yet been named. This development places not only Intel but also the future administration of Donald Trump in a tricky situation. Disappointing figures mark Gelsinger's tenure. With a record loss of $16.6 billion in the last quarter and the first dividend suspension since 1992, Intel made headlines. Plans to reduce more than 15% of the workforce highlight the deep-seated issues. During Gelsinger's tenure, the company’s stock price fell by 60%, while the Semiconductor Index rose by the same percentage. Gelsinger took over during challenging times. Once the market leader in semiconductor technology, Intel lagged behind expectations during the smartphone revolution and the emerging boom of artificial intelligence. Technical setbacks caused Intel to fall behind its Taiwanese competitor TSMC. Gelsinger's attempt at a strategic realignment, splitting production and establishing a new foundry business, ultimately failed. Despite investments of $100 billion in new production facilities, profits remained elusive. To stabilize, Intel turns to private equity firms as well as government subsidies. Recently, the government announced a support package of nearly $8 billion to bolster the company. The new Trump administration now faces a difficult decision. On one hand, it is critical of subsidization; on the other, Trump wants to break Taiwan's dominance in the chip sector. Whether he will save Intel or rely on TSMC remains to be seen.