The chief executive of Intel has been forced out after failing to return the American microchip company to the cutting edge, despite promises of billions from Joe Biden’s administration.
Pat Gelsinger, who joined the Silicon Valley icon 45 years ago, said he had retired with immediate effect, three years after returning to the company with a pledge to resurrect US leadership in microchip technology.
Shares rose by as much as 4pc after his departure was announced.
Mr Gelsinger stepped aside after Intel’s board lost faith in his ability to turn the business around, Bloomberg reported. He was given the option of retiring or being removed at a meeting last week.
Intel has secured almost $8bn (£6.3bn) from the US Commerce Department under Joe Biden’s Chips Act, a mammoth set of subsidies designed to bring cutting-edge chip manufacturing to American shores.
However, the company has struggled to stem billions of dollars in losses after ceding leadership in production of the most advanced processors to Taiwan’s TSMC.
Intel, credited with inventing the microprocessor, posted a $16.6bn loss in the most recent quarter after writing off billions it had invested in advanced chipmaking.
It is expected to post its first annual loss since 1983, when US chipmakers were being hammered by cheaper Japanese competitors.
Mr Gelsinger, who had been Intel’s chief technology officer before leaving the company to run software firm VMware, had returned in 2021 to bring Intel back to its technical roots. His appointment as chief executive came after a period when the company was criticised for sacrificing investment in order to pay shareholders huge dividends.
Intel has repeatedly missed out on technological shifts such as the rise of smartphones, where it ceded ground to Britain’s Arm, and artificial intelligence, which has been dominated by Nvidia.
Nvidia has been vying with Apple for the position of the world’s most valuable company.
Mr Gelsinger sought to radically change Intel’s business in order to revive its edge, investing billions in new factory projects and outsourcing some manufacturing to Asian rivals.
He also loudly voiced concerns about the US losing ground to overseas competitors, vocally courting subsidies from President Biden.
As well as support from the US, Intel has received promises of €10bn (£8.3bn) from Germany to build a €30bn plant there touted as the country’s biggest ever foreign investment.
However, his efforts are yet to pay off. Shares have fallen by almost 50pc this year and the company has been named as a potential target for a takeover or break-up.
