The company has experienced losses consecutively for the past three quarters.
Intel CEO Pat Gelsinger has retired after almost four years leading the tech corporation, with his exit coming amid a steady decline in the company’s revenues and share value.
Gelsinger was
appointed as Intel’s CEO and became a member of the company’s board of directors in February 2021. He stepped down from these posts effective Sunday, according to a Dec. 2
statement from Intel. Gelsinger’s time as CEO has been a financially tumultuous time for the corporation. Quarterly
revenues peaked at $20.5 billion in the fourth quarter of 2021 and have been on a decline ever since. For the most recent quarter, revenues were at $13.28 billion, more than 35 percent lower than the 2021 fourth-quarter peak.
Meanwhile, Intel has suffered
net losses in six out of the previous 11 quarters since 2022. This includes consecutive losses in the most recent three quarters. In August, the company announced the
termination of 15,000 roles, accounting for 15 percent of its workforce, to cut costs.
News of Ginsler’s exit triggered a
positive run on the stock. Shares ended Friday at $24.05 and opened Monday at $24.80, a more than 3 percent increase.
Intel shares have plummeted during Gelsinger’s tenure.
Shares peaked at roughly $68 in April 2021 during the initial months of his term but are now trading at around $25 as of 11:00 a.m. EST on Monday, a decline of more than 63 percent.
Last month, S&P Dow Jones Indices announced it was replacing Intel on the Dow Jones Index with Nvidia. Intel had been listed on the index for 25 years.
Investor interest in Intel has fallen as the company
ceded some of its CPU market share to rival AMD over the past few years. Meanwhile, Intel hasn’t succeeded in creating a significant impact in the
AI chip sector market, which NVIDIA is currently dominating.
Following Gelsinger’s exit, Intel said they were looking to “find a permanent successor,” according to the company’s statement. Meanwhile, David Zinsner and Johnston Holthaus have been named as interim co-CEOs.
Zinsner is currently Intel’s executive vice president and chief financial officer while Holthaus has worked as a general manager at the company, Intel said.
Holthaus was also appointed as the CEO of Intel Products, a newly created post that covers the company’s Network and Edge Group, Client Computing Group, and Data Center and AI Group.
Intel said that Gelsinger, during his tenure as CEO, “helped launch and revitalize process manufacturing by investing in state-of-the-art semiconductor manufacturing.”
Intel’s Investments, China Market
Gelsinger’s exit was announced a few days after Intel
announced that the U.S. Department of Commerce awarded it $7.86 billion in funding support. The funds will go toward the company’s projects in Oregon, Arizona, Ohio, and New Mexico, according to a Nov. 26 statement.
The award, made under the U.S. CHIPS and Science Act, “coupled with a 25 percent investment tax credit, will support Intel’s plans to invest more than $100 billion in the U.S.,” the company said.
“Intel’s planned U.S. investments, including projects beyond those supported by CHIPS, support more than 10,000 company jobs, nearly 20,000 construction jobs, and more than 50,000 indirect jobs with suppliers and supporting industries.”
Intel said it plans to
construct leading-edge logic fabrication facilities in Arizona, modernize two facilities in New Mexico, set up a new chip-making ecosystem in Ohio, and invest in research and development facilities in Oregon.
Intel’s market share has declined over the past several years. At the beginning of 2017, Intel accounted for nearly 82 percent of the CPU market. It now has around 61 percent, according to
data from Statista.
A key concern for Intel is China, where there is a concerted
effort by the Chinese Communist Party to reduce dependence on chips made by U.S. companies such as Intel and AMD. China is Intel’s largest market, accounting for 27 percent of the company’s revenues last year.
The Chinese regime has been attempting to build a local semiconductor industry while it deals with chip export curbs implemented by the United States.
In October, the Cybersecurity Association of China
claimed that Intel’s products featured a backdoor installed by the U.S. National Security Agency.
At the time, Intel said in a statement to The Epoch Times that it looks “forward to working with the relevant officials on this matter to clarify any questions that may exist and demonstrate Intel’s deep commitment to the safety and security of our products.”
