Pat Gelsinger, CEO of intel, was forced to resign as the board of directors lost confidence in his ability to reverse the fortunes of the iconic chipmaker, exacerbating the turmoil for this industry pioneer.

According to sources familiar with the matter, the conflict between both sides reached a climax last week when Gelsinger met with the board of directors to discuss the progress of the company in regaining market share and narrowing the gap with nvidia. A source who requested anonymity because the procedures were not public, said Gelsinger could choose to retire or be dismissed, he chose to announce the end of his career at intel.

Intel stated that during the board's search for Gelsinger's successor, Chief Financial Officer David Zinsner, and Executive Vice President Michelle Johnston Holthaus will serve as interim co-CEOs. Intel's board independent chairman, Frank Yeary, will serve as interim executive chairman.

At 63 years old, Gelsinger was once hailed as the savior of this chip giant. Three years after taking the helm at intel, he expressed his love for the company, vowing to restore its dominant position in the semiconductor industry. The executive started working at intel in his teens but left in 2009 to become CEO of VMware. Upon returning to intel in 2021, he promised to regain the chipmaker's leading position in the manufacturing sector—a position previously surpassed by competitors like taiwan semiconductor.

Intel investors eager to see company transformation initially welcomed the CEO's departure. On December 2, intel's stock in New York rose by 6% at one point, but later fell during trading hours. At the close of the New York Stock Exchange, the stock fell by 0.5% to $23.93, representing a 52% cumulative decline so far this year.

Gelsinger aimed to lead intel beyond its traditional dominance in personal computing and server processors, expanding its business to manufacture chips for other companies—a move never attempted by intel before—putting it in direct competition with taiwan semiconductor and Samsung. As part of the revival strategy, Gelsinger devised an expensive plan to expand intel's factory network, including building a large campus in Ohio, a project that received federal funding support under the Chip Act.

Whoever succeeds Gelsinger will face a series of issues he had to address when he took the helm, including the consequences of past decision-making mistakes. This once coveted position in the $500 billion chip industry has now become an almost insurmountable challenge. The next CEO must compete with richer rivals, catch up in artificial intelligence computing, and demonstrate that intel can still be as innovative as it once was.

Finding a candidate to fill this high-profile position may not be an easy task. Before Gelsinger was appointed as CEO to replace Bob Swan, several well-known executives were speculated to be possible candidates. Many on Wall Street suggested that Su Zifeng from AMD should take on this role.

Stacy Smith, a member of intel's board of directors, previously served as the company's chief financial officer and was also a candidate for the chief executive officer position. He currently serves as the executive chairman of Kioxia.

Rosenblatt Securities analyst Hans Mosesmann stated in a report that intel has no internal potential candidates. He said, "It will be a daunting task for a new external CEO to come to intel, requiring years of effort, as the current innovation cycle is more intense than ever before."

In November, Kissinger also stated that he is "energetic, passionate," still has the support of the board of directors, and is making progress. Despite reports of a takeover bid, he expressed determination to maintain the company's unity.

At last week's meeting, Kissinger's main challenge was the lack of market-winning products - the board believes this was overlooked in driving intel's transformation into a custom chip manufacturer. Sources said he was asked to stay on to assist in his succession, but he showed little interest, prompting his decision to end his term over the weekend.

"Today is certainly a mixed day because for most of my career, this company has been my life," Kissinger said in a statement. "For all of us, this has been a challenging year, and we have made tough but necessary decisions to enable intel to adapt to current market dynamics."

One of intel's greatest challenges is the industry reshuffle triggered by ai computing. Nvidia has turned its graphics chips into a crucial component of datacenters, dominating the field and capturing the hundred billion dollar market share that once belonged to intel. This once struggling niche competitor in intel's shadow has now become the world's largest public company by market cap. Intel's efforts to enter this market with new products have yet to yield results.

"We know there is more work to be done at the company and are committed to restoring investor confidence," said Gelsinger in intel's statement. "As a board, we understand that we must place our product division at the center of all our work. Our customers demand this of us, and we will serve them."

Kissinger's departure could lead to even larger strategic shifts.

This move has opened the door to a new global strategy. We have been advocating for this strategy for some time now," said Chris Caso, of Wolfe Research. "Although Gelsinger has generally successfully pushed forward Intel's technology roadmap, considering Intel's absence in the field of artificial intelligence, we believe Intel's scale is not sufficient to independently pursue leading manufacturing technologies.

Intel's turbulent situation also means a setback for the Biden administration's ambition to rebuild the domestic semiconductor industry. Intel's outgoing CEO, a staunch supporter of the Chip and Science Act, promised to build large new factories in the United States.

In the end, the U.S. government signed a final agreement to provide Intel with nearly $7.9 billion in federal funding, the largest direct subsidy in the program. While the scale of this agreement is smaller than the previous proposal, it means that once Intel's projects in four states in the USA reach negotiation milestones, the company can start receiving funds.

President-elect Donald Trump criticized the 2022 Chip and Science Act, a $39 billion appropriation, $75 billion in loans and loan guarantees, and a 25% tax credit, to revive the U.S. chip manufacturing industry. Trump called the plan 'very bad,' and Republican colleagues threatened to amend or even repeal the law.

On November 1st, Intel released a disastrous financial report, revealing unexpected losses and a dim sales outlook. Intel also suspended its dividend payout, which has been ongoing since 1992. To control costs, Intel announced it will lay off over 15% of its workforce, with current total employees numbering around 110,000.

Interim Co-CEO Holt-Haus will also take on the new role of Chief Executive Officer of the company's products division, responsible for client computing, datacenter, artificial intelligence, and network operations. Holt-Haus started her career at Intel nearly thirty years ago and previously served as General Manager of Client Computing (including personal computers).

Zinsner joined Intel in 2022 from Micron Technology, the largest memory chip manufacturer in the USA. He has held various leadership positions primarily in the finance department. His experience in dealing with a challenging memory market is considered crucial in guiding Intel through an unprecedented period in its history.

For most of the past 30 years, Intel has had ample cash to outperform competitors in new technologies and products - this has been the cornerstone of its success. However, now the company's debt exceeds $50 billion and it needs external investment to realize its plans.