A little more than a month before Intel CEO Pat Gelsinger announced his sudden retirement on Monday, four of the company’s former board members wrote a public letter warning that the iconic U.S. chip giant was running out of time to turn its business around and urged the company to split itself into two.
In an op-ed published by Fortune in October, the board members said that splitting Intel into two companies—one focused on designing its own microprocessors, the other a "foundry" to manufacture chips for other companies—was the only way to “stem the bleeding” and ensure that the most advanced chips continue to be manufactured in America.
"Intel’s CEO, Pat Gelsinger, is a true technologist who played an important role in the company’s storied past. Today, he’s faced with a difficult decision: whether to break up the iconic company. He already announced a plan to establish Intel Foundry as an independent subsidiary inside Intel. But this doesn’t go far enough," the former directors wrote, calling instead for Intel to split design and manufacturing businesses into two entirely separate companies.
Gelsinger made it his mission to revive Intel as a leading manufacturer when he returned to the company as CEO in 2021, after a stint leading VMWare. When he took the job, Intel was grappling with manufacturing problems that had caused it to lose its lead to Taiwan's TSMC in terms of producing the most advanced chips. Meanwhile, demand for AI-optimized chips made by Nvidia have eaten into Intel's sales.
The U.S. government has committed nearly $8 billion in grants to Intel through the CHIPS Act.
In their October op-ed, the former board members—David B. Yoffie, Reed Hundt, Charlene Barshefsky, and James Plummer—said that the U.S. government should make its financial assistance contingent on Intel splitting itself into two companies.
"The government has the leverage to force Intel down a better path—and it must use it now."
While the full details surrounding Gelsinger's surprise exit have yet to be reported, the open letter from the former Intel directors provide a valuable glimpse at the challenges facing the CEO in his final weeks at the company.
