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Highlights
- Intel CEO Pat Gelsinger retires after over 40 years; interim co-CEOs appointed.
- Intel shares rise 4.4%, with other chip stocks like TSM and Arm also gaining.
- Intel plans to invest over $100 billion in U.S. chipmaking, backed by Chips Act funding.
Intel (NASDAQ:INTC) shares surged over 4% during mid-day trading on Monday following the announcement that CEO Pat Gelsinger has stepped down after a storied career spanning more than four decades at the semiconductor giant. The company revealed that Gelsinger retired from his role on Sunday and will also leave his position on Intel’s board of directors.
To manage the transition, Intel appointed Chief Financial Officer David Zinsner and Michelle Johnston Holthaus, Chief Executive of Intel Products, as interim co-CEOs. Additionally, Frank Yeary, the independent chair of Intel’s board, will take on the role of interim executive chair as the company searches for a new leader.
In a statement, Yeary acknowledged the challenges Intel faces, emphasizing the company's commitment to regaining manufacturing competitiveness and building a world-class foundry to restore investor confidence.
The announcement comes as Intel continues to lose market share to competitors like Nvidia, which has surged ahead amid the artificial intelligence boom. Despite Intel’s efforts to rebuild its dominance in the semiconductor industry, the company has faced significant setbacks, including a 47% drop in its stock price this year.
The leadership change coincides with Intel’s involvement in the U.S. Chips Act program, designed to bolster domestic semiconductor manufacturing. In late November, the U.S. Commerce Department finalized Intel’s Chips Act funding, allocating up to $7.86 billion in direct support, slightly below the $8.5 billion initially proposed. This funding is complemented by a $3 billion contract under the Secure Enclave program, aimed at producing advanced chips for government use.
Intel plans to leverage this funding to expand its semiconductor manufacturing capabilities across several U.S. states, including Arizona, New Mexico, Ohio, and Oregon. The initiative represents an investment exceeding $100 billion and is expected to enhance the U.S.’s role in the global chip supply chain.
The market reacted positively to the news of the leadership shift and Intel’s ongoing efforts. Shares of Taiwan Semiconductor Manufacturing Company (TSM) rose nearly 5%, and British chip designer Arm (ARM) gained 4.5%, reflecting investor optimism about the broader semiconductor sector.
