When Mr Gelsinger was brought in to run Intel three years ago, he was hailed as a savior of the chip pioneer. The executive began working at the company when he was a teenager, but left in 2009 and became CEO of VMware. 

Upon returning to Intel, he vowed to restore the chipmaker’s technological edge — something it had lost to rivals like Taiwan Semiconductor Manufacturing Co (TSMC).

However Mr Gelsinger went further, setting out to turn Intel into a made-to-order manufacturer of chips for other companies — an area where TSMC and Samsung Electronics Co already excelled. 

As part of his revival strategy, Mr Gelsinger laid out a costly plan to expand Intel’s factory network. That included building a massive new complex in Ohio — a project for which the company received federal aid from the Chips and Science Act.

Mr Gelsinger was thrown a curveball in the form of Nvidia Corp, which turned its graphics chips into a key component for data centers. Nvidia’s processors proved especially adept at developing artificial intelligence models, and cloud-computing companies began shifting their budgets toward those components. 

Though Intel has its own so-called AI accelerator — the Gaudi line — it remains far behind Nvidia.

“We know that we have much more work to do at the company and are committed to restoring investor confidence,” Mr Yeary said in the company’s statement.

 As a board, we know first and foremost that we must put our product group at the center of all we do 

"Our customers demand this from us, and we will deliver for them.” 

Intel’s turmoil also represents a setback for the Biden administration’s ambitions to rebuild the US semiconductor industry.

Domestic manufacturing boost

President Joe Biden made a trip to Chandler, Arizona, in March to announce that Intel would get the largest award from the Chips Act, which earmarked a total of $39bn in grants — plus billions more in loans and tax breaks — to boost domestic manufacturing of critical electronic components.

Intel’s challenges came into sharp focus during a disastrous earnings report on August 1, when the company delivered a surprise loss and dire sales forecast. Intel also suspended its dividend, which it had paid out since 1992.

To get costs under control, Intel said it will cut more than 15% of its workforce — which numbers around 110,000. The following day, Intel shares tumbled by the most since at least 1982. It has lost more than half of their value so far in 2024.

In her newly created role as CEO of Intel Products, Ms Holthaus will oversee the company’s client computing, data centre and AI, and network and edge groups. Ms Holthaus began her career with Intel nearly three decades ago and had previously served as executive vice president and general manager of client computing.