Intel is at a critical turning point. With Pat Gelsinger’s abrupt retirement, the company faces hard decisions about its future. To survive, Intel must commit to becoming a world-class foundry, double down on AI and data center chips, and avoid the temptation to split itself apart.
Intel’s announcement that CEO Pat Gelsinger is retiring effective immediately signals the end of an ambitious, but troubled, era for the semiconductor giant. Gelsinger returned in 2021 with a clear mission: restore Intel’s manufacturing dominance and establish it as a leading foundry for third-party clients. But after three years of missed deadlines, heavy losses, and mounting pressure from competitors, the board decided it was time for a change.
This leadership shake-up raises urgent questions. Can Intel reclaim its place in the semiconductor industry? Will it split its products and foundry businesses? Can the company compete in AI, or is it too far behind Nvidia? These questions will define Intel’s future. The answers lie in a combination of strategic focus, execution, and a return to the vigilance that once made Intel a tech powerhouse.
Intel’s Foundry Ambitions: The Right Vision, Poor Execution
Pat Gelsinger’s IDM 2.0 strategy focused on turning Intel into a global leader in chip manufacturing, not just for its own processors but for other companies. This was the right vision. The world needs a strong alternative to TSMC and Samsung, especially with geopolitical risks surrounding Taiwan.
Intel’s foundry efforts showed promise. The company announced major investments in new fabs in Ohio, Arizona, Ireland, and Germany, supported by funding from the CHIPS Act. Intel aimed to deliver cutting-edge manufacturing processes like 2nm and 1.8nm nodes by the end of 2024. The goal was to reclaim leadership in process technology by 2025.
But execution fell short. Delays in rolling out new nodes, manufacturing missteps, and a $17 billion loss last quarter undermined confidence. Intel’s stock dropped by over 50% in 2024, and the company was removed from the Dow Jones Industrial Average — a symbolic blow for a firm that once defined American tech innovation.
Splitting the Company Would Be a Mistake
Some industry analysts and board members believe Intel should split its foundry and product businesses. The logic is that separating the two would unlock value and allow each side to focus on its core mission. But this approach risks weakening both divisions.
Intel’s strength has always been the synergy between chip design and manufacturing. Intel Products — CPUs, GPUs, and AI accelerators — provide a guaranteed customer for Intel Foundry. This internal demand helps stabilize the foundry business as it grows its third-party client base. Splitting the two would remove this anchor and create uncertainty for potential foundry clients.
TSMC’s success is built on volume. Intel Foundry needs consistent, high-volume orders to compete. Without Intel Products as an internal client, the foundry business may struggle to achieve the scale necessary to compete with TSMC and Samsung.
Refocusing on AI and Data Center Chips
Intel’s product strategy needs sharper focus. The company should prioritize markets where it still has a competitive edge and growth potential: AI, data centers, and edge computing.
Intel’s Gaudi AI accelerators and Xeon server CPUs are competitive offerings. Gaudi 3, set to launch in 2025, promises a strong price-to-performance ratio compared to Nvidia’s H100. Intel’s approach targets enterprise AI models and inference tasks, where demand is growing. By concentrating on these segments, Intel can carve out a niche distinct from Nvidia’s focus on hyperscalers.
Edge computing is another opportunity. The rise of IoT and decentralized AI requires efficient, reliable processors. Intel’s experience in embedded computing positions it well to capture this market.
Intel must also continue developing specialized chips for industries like automotive, aerospace, and defense. These sectors value security, reliability, and domestic manufacturing — areas where Intel can still win.
Rebuilding a Culture of Paranoia and Precision
Intel’s decline is not just about technology; it’s about culture. Under Andy Grove, the company thrived on a philosophy of paranoia — constant vigilance, fear of complacency, and relentless innovation. In recent years, Intel has lost that edge. Bureaucracy, slow decision-making, and missed opportunities have eroded its competitive spirit.
The next CEO must restore this culture. Intel needs a leader who can instill urgency, streamline decision-making, and drive execution. The company must attract top engineering talent and offer them the freedom to innovate. Clear communication with investors, employees, and customers will be essential to rebuild confidence.
The Role of Government Support
Intel’s survival is tied to national security. The U.S. government recognizes the risks of relying on TSMC and Samsung for critical chip production. The CHIPS Act provided billions to boost domestic manufacturing, but Intel needs more than funding. It needs long-term government partnerships.
Defense contracts, infrastructure projects, and AI initiatives can provide stable demand for Intel’s foundry services. Aligning with national security priorities can help Intel secure its place as a critical player in the global semiconductor supply chain.
A Defining Moment for Intel
Pat Gelsinger’s departure marks a moment of reckoning for Intel. The company stands at a crossroads. The next CEO must make tough decisions, but the path forward is clear. Intel must:
- Commit fully to its foundry ambitions and execute with precision.
- Refocus its product strategy on AI, data centers, and edge computing.
- Avoid splitting the company, preserving the synergy between design and manufacturing.
- Rebuild a culture of paranoia and relentless innovation.
Intel has the resources, talent, and history to reclaim its place in the industry. But survival requires more than vision — it demands flawless execution. The stakes are high, and the world is watching. Intel’s next steps will determine if it manufactures the future or becomes a cautionary tale of a giant that lost its way.
