Intel shares rise after Pat Gelsinger’s resignation

Intel (INTC+4.62%) Shares rose over 4% during midday trading on Monday after the company made the announcement The CEO is out.

After more than four decades at the chip pioneer, Intel CEO Pat Gelsinger retired from the company on Sunday and resigned from Intel’s board of directors said. Intel CFO David Zinsner and Intel Products CEO Michelle Johnston Holthaus will now serve as interim co-CEOs while Intel’s board searches for another leader. Frank Yeary, Intel’s independent chief executive, will become its acting chief executive.

“While we have made significant progress in restoring manufacturing competitiveness and building the capabilities to become a world-class foundry, we know we still have work to do within the company and are committed to restoring investor confidence,” said Yeary in a statement.

Shares of Intel, which have fallen over 47% so far this year, rose about 4.4% on the news, while shares of Taiwan Semiconductor Manufacturing Company (TSM+5.23%) U.S.-listed shares rose nearly 5%, as did those of British chip designer Arm’s (ARM+5.04%) Shares rose 4.5%.

Gelsinger’s resignation comes as the chipmaker is losing ground to rivals such as Nvidia (NVDA+0.85%)which has benefited from the boom in artificial intelligence.

At the end of November, the US Department of Commerce completed funding for Intel’s Chips Act up to $7.86 billion – less than that proposed $8.5 billion announced in March. However, the final direct financing is in addition to a $3 billion contract Intel was awarded under a part of the Chips Act known as the Secure Enclave. The program is intended to expand production of cutting-edge chips for the U.S. government.

With the Chips Act funding, Intel plans to expand its presence in the U.S. semiconductor industry with chip manufacturing and advanced packaging sites in Arizona, New Mexico, Ohio and Oregon – an investment worth more than $100 billion.

Meanwhile, Intel was fell from the Dow Jones Industrial Average in November and replaced by Nvidia.