INTEL AS WE'VE BEEN TALKING ABOUT JUMPING ON THE NEWS PAT GELSINGER IS RETIRING. NOW UP MORE THAN 4%. WE WILL CONTINUE ON THAT STORY RIGHT NOW JOINING US TO TALK MORE ABOUT IT IS MANDEEP SINGH OF BLOOMBERG INTELLIGENCE.

PAT GELSINGER RETIRES EFFECTIVE IMMEDIATELY, THE COMPANY HAS I GUESS NO SUCCESSION PLAN SO THEY PUT IN TWO INTERIM CEOS. WHY? MANDEEP: LOOK, THE TURNAROUND DIDN'T PLAY OUT THE WAY HE EXPECTED OR THE STRATEGY HE LAID

OUT AND IN THIS CASE THEY ARE PROBABLY GOING TO LOOK FOR SOMEBODY EXTERNALLY TO COME IN AND PAT CAME FROM OUTSIDE BUT CLEARLY HE TRIED TO TAKE TOO MUCH ON IN TERMS OF TURNING AROUND BOTH THE DESIGN SIDE AND THE FOUNDRY SIDE AND IN THIS

CASE MY BET WOULD BE ANYONE COMING IN IS GOING TO PICK A SIDE. IS INTEL GOING TO BE A CHIP DESIGN COMPANY OR A FOUNDRY COMPANY. TURNING AROUND THE SHIP AS IS ALL THE PARTS IS VERY HARD.

IT DEFINED -- THE FACT THAT NOT ONLY TO THE NAME INTERIM CEO HE IS STEPPING DOWN IMMINENTLY, WASN'T NECESSARY TO HAVE THE LEADERSHIP IN THE MIDDLE OF WHAT IS ALREADY A DRASTIC TURNAROUND

STORY. MANDEEP: LOOK AT WHAT'S HAPPENED OPERATIONALLY WITH INTEL. THEY HAD A COUPLE OF ROUNDS OF LAYOFFS AND THE DIRECTION THAT PAT HAD LAID OUT NOT PICKING THE SIDE HAS MADE IT VERY HARD FOR INVESTORS TO GAUGE IS THIS

COMPANY GOING TO TURNAROUND EVEN IN THE MEDIUM-TERM BECAUSE EVERYBODY ANTICIPATES A BIG PC UPGRADE CYCLE EVEN THOUGH INTEL IS LOSING SHARE OF THE DATA CENTER SIDE THE PC SIDE INTEL IS

STILL DOMINATING AND THEY ARE THE INCUMBENT PLAYERS SO NOT PARTICIPATING IN A RATE CYCLE WOULD BE A VERY BIG DEAL FOR A COMPANY LIKE INTEL AND I'M GUESSING THE BOARDS DID NOT HAVE

ENOUGH CONFIDENCE IN PAT'S STRATEGY SO. MATT: NOT EVEN ENOUGH CONFIDENCE TO LEAVE THEM THERE FOR A MONTH WHILE THEY FIND A NEW CEO TO REPLACE HIM FULL-TIME. THEY HAD TO HAVE HIM OUT INSTANTLY.

WHAT DOES THIS MEAN FOR THE BILLIONS OF DOLLARS OF GOVERNMENT FUNDING INTEL IS EARMARKED TO GET. THEY WILL STILL KEEP GETTING IT BECAUSE WHEN YOU LOOK AT THE PRESIDENT -- PRECEDENT WE HAVE FOR AND

THEY INVESTED IN A FOUNDRY BUSINESS IN THE GLOBAL FOUNDRIES AND BECAME A DESIGN COMPANY. I EXPECT SOMETHING SIMILAR TO HAPPEN WITH INTEL BECAUSE THE GOVERNMENT WANTS TO MANUFACTURING TO STAY IN THE U.S.

SO IF THE FOUNDRY BUSINESS WERE TO BE DIVESTED THEN THEY WOULD CONTINUE TO GET FUNDING BECAUSE AS A MANUFACTURER LIKE TSMC. MATT: THE FOUNDRIES THEY DIVEST WOULD GET THE FUNDING.

MANDEEP: ON THE CHIP DESIGN SIDE THE PC BUSINESS IS STILL VERY HEALTHY. IT WILL GENERATE ITS OWN FREE CASH FLOW SO THAT MAY SUSTAIN ON ITS OWN. SO IT COMES DOWN TO WHETHER FOUNDRY GETS DIVESTED OR NOT, AND I THINK FOR THE

Intel Replaces Gelsinger With Two Interim Co-CEOs

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