Intel CEO Pat Gelsinger has retired; the global chipmaker’s challenges remain

One of Oregon’s largest employers is under new leadership as of Sunday.

Major chipmaker Intel announced Monday that CEO Pat Gelsinger has retired after spending four years at the helm. Two senior executives will fill the top role at the semiconductor firm while the board searches for a longer-term replacement.

Intel is an anchor company for Oregon’s semiconductor industry with more than 20,000 workers in the state. While the company is headquartered in Santa Clara, Calif., Intel leaders often refer to the Hillsboro campus as the heart of its development and research.

For decades the computer chip maker – which is one of the few companies in the industry that develops, designs and manufactures chips – enjoyed dominance in the semiconductor market.

But in recent years, industry analysts say the company fell behind when it didn’t aggressively move towards chip making for artificial intelligence and lost market share to major competitors. In August its leadership followed up with a cost- cutting plan that shaved 15% of employees from its global workforce.

In a written statement, Gelsinger said leading Intel has been the “honor of my lifetime” and called the announcement of his retirement “bittersweet.” He leaves the company as it works to regain footing after financial struggles.

“It has been a challenging year for all of us as we have made tough but necessary decisions to position Intel for the current market dynamics,” Gelsinger wrote in the statement. “I am forever grateful for the many colleagues around the world who I have worked with as part of the Intel family.”

Jon Metzler is a continuing lecturer at University of California, Berkeley’s business school. When discussing anchor businesses with classes, he often uses Intel in Oregon as an example. In part because of cost-trimming measures announced over the summer, Metzler says the leadership change wasn’t a shock.

“At that time there were folks who were like, ‘do you keep Pat or not as the CEO?’ So in that sense, the fact that there’s a change at the top is not necessarily surprising,” Metzler said. “But the way I responded to that question back then was: well, if not Pat, then who?”

Metzler said the company may have come up with a short-term solution for now – it named company executives David Zinsner and Michelle Johnston Holthaus as interim co-CEOs. However, in the long term, he said whoever takes on Intel’s top position will have a challenging job of transitioning the business while securing more capital.

“Whoever takes on the role has to take on that responsibility of how exactly are we going to fund the company going forward,” Metzler said.

Despite recent financial struggles and layoffs – including 1,300 in Washington County – Intel leaders have said they remain committed to expanding operations in Hillsboro. Meanwhile, economists following the state’s semiconductor industry predict it will add thousands of jobs in the next decade, partially because of commitments from companies like Intel to expand in Oregon.

Earlier this year, Intel announced it would invest more than $30 billion in its Hillsboro campus. The company then picked Oregon as the home of a first-of-its kind tool meant to advance the development of semiconductors.

The device, called a high numerical aperture extreme ultraviolet lithography scanner, is still a few years out from significantly affecting the company’s output. But it serves as an investment in making up ground lost to other chip makers that surged ahead in the AI boom.

And Intel’s stated commitment to domestic chips manufacturing has kept it in the running for federal and state funding. Last month the federal government awarded Intel $1.8 billion to upgrade its Oregon facilities. It’s part of $8 billion in CHIPS Act funding awarded to Intel to expand its domestic development and manufacturing. Oregon lawmakers also approved more than $100 million in state funding for Intel.

But to regain its spot at the top of the semiconductor industry, Intel is going to need even more funding. Gelsinger was able to steer the company toward winning federal and state subsidies, but it’s unknown if a new CEO – or if new leadership in Washington D.C. – will be receptive to that path.

In terms of new leadership for the federal government, Metzler at UC Berkeley said in the last few years both Democrats and Republicans have supported the semiconductor industry, but might not always agree on the best way to do that.

“There could be a revisitation of what sort of firms do we want to support, and at what level,” Metzler said. “But broadly, I think the issue of trying to reshore manufacturing is one that has bipartisan support.”