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With new CEO, Intel aims to get back to basics and regain leadership in the industry
Even after leaving Intel in 2021, Pat Gelsinger never stopped talking about the company he worked for from a young age. When asked about the chipmaker, he told listeners how his mentor and former Intel CEO Andy Grove shaped it. And now Pat is at the helm to bring back Intel glory.
The new leader has a chance to revive the leadership approach that made Intel the dominant chipmaker, while leveraging expertise from other areas to help the company recover from its biggest crisis in at least a decade.
Pat Gelsinger, 59, is making his comeback at a time when Intel is facing strong opposition – competitors are sometimes selling better products, and large customers are switching to their own processors. His job is to fix Intel’s manufacturing difficulties that former CEOs Bob Swan and Brian Krzanich were unable to overcome.
Former Intel CEO Robert Swan
Mr. Gelsinger has the technical skills and deep experience he will need to bring about change at Intel. As a former chip designer, he understands the complex technical solutions that lie at the heart of Intel products. And as a former CEO of VMware, he has witnessed the cloud computing boom that has transformed Intel’s most important server market.
“Mr. Gelsinger is an investor darling, and in our conversations he was the most requested next Intel CEO,” said Chris Caso, analyst at Raymond James & Associates. “He is both an Intel veteran and an outsider, from a much smaller and agile organization that has been successful in the last couple of decades in creating a new ecosystem and a set of industry standards with many fundamental innovations.”.
Intel Shares Jump 8%, VMware Down 7% After Announcement Of Leadership Change On Wednesday.
Around 2021, Mr Gelsinger was the lead technical person who announced Intel’s new strategy to release chips and launch updated manufacturing technologies at a faster pace than before. The need was urgent as AMD rival was catching up, capturing a quarter of the lucrative server processor market versus near-zero numbers a few years earlier. At the time, he called this new continuous sequence of technical updates “Tick Tock”. The strategy worked, and a few years later AMD owned less than 1% of the server chip market.
Pat Gelsinger essentially grew up at Intel, joining the company in 1979 as an 18-year-old after graduating from technical college. He was involved in the development of Intel’s most important chip, the 8086, while simultaneously studying at Stanford University.
Mr. Gelsinger moved up the corporate ladder at a company that nurtured leaders by relocating candidates to enable them to experience different aspects of their business. It was in his role as Intel’s first CTO that he became known as a gifted innovator with a solid understanding of the computing industry.
Pat Gelsinger is reported to be quite strict, but makes time for employees of all levels to turn to him for advice. At the same time, he is strict with himself, and after leaving Intel he criticized his own decisions more than once.
Pat Gelsinger, Salt & Light
After leaving Intel in 2021, he became a candidate to replace EMC CEO Joe Tucci, who was planning to retire. But the latter decided to stay, and Mr. Gelsinger took over the leadership of VMware, which was majority owned by EMC at the time.
At VMware, the CEO faced a number of issues that needed to be quickly addressed. Trying to stimulate stalled growth, Mr. Gelsinger came up with several strategies, and one of them, which included a partnership with the leading cloud service Amazon, gave excellent results. After a sharp downturn during the first part of Gelsinger’s reign, VMware shares have surged since early 2021 as revenue growth rebounds.
Restoring trust with leading cloud providers such as Amazon and Google will be a key challenge for Pat Gelsinger at the helm of Intel. These companies, among the largest buyers of high-end Intel server processors, are increasingly developing and outsourcing their own dies. Delays in Intel’s adoption of new process technology contribute to this.
Microsoft is working on creating its own server processors. Apple is also replacing Intel chips with its own in Macs. The biggest challenge for Intel right now is deciding on Intel’s manufacturing future. When Mr. Gelsinger left, the company had the most advanced manufacturing facilities in the world. Now it lags behind TSMC and Samsung, which print crystals under contracts. Intel shares dropped 17% last year despite rising shares of most chipmakers.