Intel CEO Pat Gelsinger retires, co-CEOs named

Intel Corp. (INTC, Financials) announced that co-CEOs David Zinsner and Michelle Johnston Holthaus will succeed Pat Gelsinger, who is retiring on December 1. Gelsinger also left Intel’s board. INTC shares rose 4% in Monday morning trading following the news.

Holthaus will also assume the newly created position of Intel Products CEO. Frank Yeary is appointed interim CEO.

Intel is trying to become more competitive in semiconductor production and overcome ongoing obstacles, including pressure on its foundry operations, so the leadership change is a given. Holthaus, who previously led Intel’s Client Computing Group, will focus on centralizing resources for the product group. Zinsner, a former executive vice president and CFO of Micron Technology (MU, Finance), joined Intel in 2022.

Analysts at KeyBanc Capital Markets said the move would demonstrate Intel’s willingness to sell its foundry business, a prospect seen as positive by some investors. Analysts also noted the difficulties in selecting a leading company capable of tackling Intel’s wide-ranging problems.

Intel faced challenges in expanding its foundry operations to compete with Taiwan Semiconductor Manufacturing Company Limited (TSM, Financials) and understood pressure from Advanced Micro Devices Inc. (AMD, Financials) and NVIDIA Corp. (NVDA, Finance) in the field of artificial intelligence. Aiming to save $10 billion in costs and simplify operations, the company announced a 15% workforce reduction in August.

Intel reported a net loss of $0.46 per share in its most recent quarter as profit fell 6.2% year over year to $13.28 billion. The foundry’s revenue fell 8% to $4.4 billion over the same period. The company also recorded $2.8 billion in restructuring charges as part of its cost-cutting initiatives.

Under the CHIPs Act, Intel received a $7.86 billion grant this week, down from a previous allocation of $8.5 billion to improve manufacturing at its U.S. headquarters.

Intel made no further strategic announcements following the CEO change.

This article first appeared on GuruFocus.