The Chip Insider®– Intel and Pat Gelsinger's Exit
Author: G. Dan Hutcheson
Explore the latest Chip Insider insights. Uncover the aftermath of Pat Gelsinger’s exit from Intel, the board’s role, and what it means for Intel’s future strategy, with lessons learned and potential paths forward.
With all the coverage of Pat Gelsinger's abrupt exit over the weekend, it doesn't make sense to mull over the details. Though there is blood in the snow as private equity is hunting Intel’s board like wolves circling a wounded elk. Yesterday, the stock was down 14% since the prior Friday’s close. Though the fire igniting the battle that ended in Pat’s “retirement” was more likely lit by the decline over the last few quarters. It was down 32% since the October 27th bottom last year versus my 90 chip stock average being up 40%... Still, the consequent 14% decline in the 4 days later after a private meeting … leaves one searching for words to describe it: Mishandled? Stumbled? Blundered? … Since so few really know what happened, I’ll let you choose.
What's more interesting to Chip Insider readers is learning from the mistakes made... What follows is an outside-in view of what, why, and how it happened and what’s most likely to come.
So far, the media appears to have placed most of the blame on Pat, as it has focused on the events that led up to his exit. However, clearly the board was involved as well, especially in how it handled the last meeting. From a mile-high perspective, I would say Pat did a poor job of managing expectations -- especially expectations from the board. Much of what’s going wrong today are problems out of Pat’s control or ones that can’t be fixed in the short four years that Pat was there. Yet, he appears to have gotten the blame.
First, products are not selling in large part because of the global COVID refresh of PCs… Pat is being blamed for losing x86 CPU share, most of which occurred under Swan and has been reasonably stable since. Worse, even the well-received Lunar Lake chip designs were well underway before Pat started… Arguably, the blame lands on Pat because he was very much a ‘buck stops here’ executive… Pat can be blamed for …
As for going forward without Pat, Intel’s strategy is adrift... The stock market appears to be voting their concern … shedding $8B in market cap. A new turn-around CEO, by necessity will change the strategy… The obvious alternative solution is for the board to put its hat in hand and invite Pat back. Micron did this ... So did Apple… I would not be surprised if we don’t see this happen…
“What you do in life echoes in eternity." — From the Movie “The Gladiator”
