Despite investor scepticism about his turnaround plan, Intel Corp. Chief Executive Officer Pat Gelsinger stated that the company now expects to reach a key technological milestone sooner than planned, allowing the storied chipmaker to regain its edge.
During the tenure of Gelsinger, Intel has been retooling factories in an effort to reclaim leadership in semiconductor process technology. By 2025, Intel’s CEO had previously promised investors the company would reach this milestone.
Now we are looking at the end of 2024, “he told Bloomberg Television in an interview.
As a result of an underwhelming outlook from Intel, Intel’s shares fell to their lowest level since November. Some on Wall Street believe Gelsinger’s comeback plan is doomed because of a drop in personal computer sales, but the company’s outlook is still positive despite the negative sentiment. He’s investing tens of billions of dollars to get Intel back on track and expand into new markets, including new factories in the United States and Europe.
When it comes to computer chips, Intel has been the industry leader for decades and is synonymous with Silicon Valley innovation. Having the most technologically advanced production was a prerequisite for such an outcome. A chip’s storage capacity, efficiency, and cost all depend on the manufacturing process used to create it.
In the absence of Gelsinger, Intel’s lead was allowed to dwindle and companies like Taiwan Semiconductor Manufacturing Co. and Samsung Electronics Co. overtook it. Gelsinger, who began his career at Intel before moving on to lead VMware Inc., returned to the chipmaker last year and pledged to restore its position.
However, the work has been difficult so far. A 6.7% drop to $43.69 in the intraday Intel stock price on Friday was the biggest one-day drop for the stock since January 27. The stock had already lost about 19 percent in the last year before the recent decline.
On Friday, Gelsinger reaffirmed his belief that the second half of 2022 will be a period of increased demand and orders.
It has been a difficult year for the $550 billion semiconductor industry to meet global demand for chips, causing problems in the production of everything from automobiles to iPhones. Gelsinger reiterated previous predictions that the production shortfall would last until 2024.