Intel’s chief executive was forced out after failing to turn the American microchip company around despite Joe Biden’s administration promising billions.

Pat Gelsinger, who joined the Silicon Valley icon 45 years ago, said he has retired effective immediately, three years after returning to the company with a promise to revive U.S. leadership in microchip technology.

After his departure was announced, shares rose as much as 4%.

Mr. Gelsinger resigned after Intel’s board lost confidence in his ability to turn the business around, Bloomberg reported. At a meeting last week, he was given the option of retiring or being removed.

Intel has secured almost $8bn (£6.3bn) from the US Commerce Department as part of Joe Biden’s Chips Act, a huge package of subsidies aimed at bringing cutting-edge chip manufacturing to American shores .

However, the company has struggled to stem billions of dollars in losses after ceding the lead in producing the most advanced processors to Taiwan’s TSMC.

Intel, credited with inventing the microprocessor, posted a loss of $16.6 billion last quarter after writing down billions it had invested in advanced chipmaking.

The company is expected to post its first annual loss since 1983, when U.S. chipmakers were squeezed by cheaper Japanese rivals.

Mr. Gelsinger, who had been Intel’s chief technology officer before leaving the company to run software company VMware, had returned in 2021 to bring Intel back to its engineering roots. His appointment as chief executive came after a period in which the company was criticized for sacrificing investments to pay high dividends to shareholders.

Intel has repeatedly missed technological shifts, such as the rise of smartphones, which saw the company fall behind its British arm, and artificial intelligence, which was dominated by Nvidia.

Nvidia is vying with Apple for the position of the most valuable company in the world.

Mr. Gelsinger tried to radically transform Intel’s business to revive its lead by investing billions in new factory projects and outsourcing some manufacturing to Asian rivals.

He also vocally expressed concerns about the U.S. losing ground to foreign competitors and loudly sought subsidies from President Biden.

In addition to support from the US, Intel has secured commitments of 10 billion euros (8.3 billion pounds) from Germany to build a 30 billion euro factory there, in what is considered the country’s largest ever foreign investment.

However, his efforts have yet to pay off. Shares have fallen nearly 50 percent this year and the company has been cited as a potential target for a takeover or breakup.

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