Intel (INTC.O) has announced the resignation of CEO Pat Gelsinger, less than four years after he took the helm in an effort to revive the American chipmaking giant. Gelsinger’s departure, effective Dec. 1, follows a board meeting where directors expressed dissatisfaction with the progress of his ambitious turnaround plan.

Gelsinger inherited a struggling Intel in 2021 and embarked on a strategy to restore its dominance in manufacturing advanced computer chips, a position the company lost to Taiwan Semiconductor Manufacturing Co (2330.TW). Despite his lofty ambitions, including significant investments in artificial intelligence and contract chipmaking, Intel failed to deliver on key promises. This, coupled with a steep decline in its stock price—down more than 60% during his tenure—prompted the board to request his resignation.

The company has named Chief Financial Officer David Zinsner and senior executive Michelle Johnston Holthaus as interim co-CEOs while a search for Gelsinger’s permanent replacement is conducted. The leadership shuffle comes as Intel grapples with declining investor confidence and increasing competition from rivals like Nvidia (NVDA.O) and Advanced Micro Devices (AMD.O).

Failed ambitions and financial strain

Under Gelsinger’s leadership, Intel embarked on an aggressive spending spree, including a $20 billion investment in new factories in Ohio and the expansion of its workforce to an all-time high of 132,000 employees. However, these investments coincided with a post-pandemic downturn in demand for laptops and PCs, significantly impacting Intel’s margins and stock price.

The company also struggled to secure major foundry clients for its contract manufacturing business, a central component of Gelsinger’s turnaround strategy. While Intel announced partnerships with companies like Microsoft (MSFT.O) and Amazon (AMZN.O), the volumes were insufficient to ensure the profitability of its factories.

Tensions over Gelsinger’s strategy extended to the boardroom, leading to the resignation of Lip-Bu Tan, a prominent board member who disagreed with the company’s direction.

Market and industry reaction

Intel shares fell 0.5% following the announcement, while competitors saw gains, with AMD rising 3.6%. The PHLX Semiconductor Index climbed 2.6%, reflecting broader investor skepticism toward Intel’s prospects under Gelsinger’s leadership.

Analysts were critical of Gelsinger’s tenure, with Rosenblatt Securities’ Hans Mosesmann commenting, “At the end of the day, you need leading-edge products, innovation, and execution, none of which we saw during Pat Gelsinger’s reign.”

Looking ahead

Frank Yeary, Intel’s board chair, acknowledged the progress made under Gelsinger but emphasized the need for further work to regain competitiveness. The company has received $7.86 billion in subsidies from U.S. officials to support its turnaround, with the results of its latest manufacturing initiatives expected next year.

The search for new leadership marks a pivotal moment for Intel, as it strives to regain its position in the global semiconductor industry amidst mounting challenges.