As a devoted follower, I’m sharing insights about the reasons behind Pat Gelsinger’s unexpected departure from Intel this year. During a talk at the Playground Global conference in Tokyo, Japan, he subtly indicated that his exit wasn’t a choice but a necessity.
He found it very tough to resign from Intel, as he had a strong desire to complete his ongoing projects; however, unfortunately, he wasn’t granted the chance to do so. (This sentence conveys the same meaning as the original quote while using easier and more conversational language.)
It’s not shocking news, but it’s intriguing to listen to Gelsinger discuss this subject. Not long after the ex-CEO of Intel stepped down, a Bloomberg report suggested that Gelsinger was pushed out by Intel’s board.
either resign or face termination.
During his tenure as Intel CEO, Gelsinger was a figure who sparked debate. He championed the IDM 2.0 strategy, which aimed to establish an in-house foundry service for Intel while simultaneously outsourcing chip production. The goal was to position Intel alongside industry giants like TSMC and Samsung, but the execution did not meet expectations.
It’s open to interpretation whether IDM 2.0 had inherent flaws or just needed more development time; however, as suggested by Gelsinger’s latest commentary and past remarks, its former CEO seems to believe that the project had an unfinished task at hand.
In the initial phase of Intel Foundry Services, notable companies like Amazon, Qualcomm, and Microsoft made their orders. Later in September 2024, Gelsinger unveiled a strategy to transform Intel Foundry into an autonomous subsidiary of Intel Corporation. However, only two months after this announcement, Gelsinger unexpectedly stepped down from his position.
During Gelsinger’s tenure as CEO, the company underwent significant changes that included reducing its workforce by approximately 15,000 employees, facing a class action lawsuit due to issues with the development of the 13th Gen and 14th Gen CPUs, and experiencing a particularly challenging quarter where Intel recorded a loss of around $1.6 billion. The Intel Foundry division played a significant role in these financial struggles.
In simpler terms, they pointed out that earning profit comes from selling products, but producing those products results in financial loss.
It’s anticipated that the Intel Foundry will require substantial financial resources due to its nature, and as a result, it’s likely to run at a loss initially. Intel has disclosed that their foundry business is not projected to become profitable until the year 2027.
The original investment in Intel Foundry with Gelsinger as CEO was a potential pathway to profit. However, since he’s no longer at the helm, that question remains unanswered. Nevertheless, we might observe Intel altering its foundry services strategy under the new leadership of CEO Lip-Bu Tan in the future.
Shortly after being appointed as the new Intel CEO, Tan expressed his commitment: “We’ll put in our best efforts to reestablish Intel as a global leader in product innovation, carve out a world-class presence in foundry services, and surprise our customers with an exceptional level of satisfaction.
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2025-07-01 17:09