Intel is replacing CEO Bob Swan after a series of manufacturing setbacks and competitive mistakes that saw the veteran Silicon Valley company lose its crown as America’s top chipmaker.
Mr. Swan, his former CFO who tenuous the top-level position for just over two years, will be replaced on February 15 by former Intel veteran Pat Gelsinger, currently CEO of VMware, the infrastructure software group.
The company made the move just days before Mr. Swan unveiled Intel’s new manufacturing strategy, along with the company’s latest results.
Last July, Intel was overtaken by Nvidia as the most valuable chip company in the United States after it delayed its next generation of chips due to manufacturing issues. Since then, Mr Swan has been under pressure to decide whether Intel would invest more in chipmaking to compete with rivals TSMC and Samsungor start outsourcing more production to them.
Intel shares opened more than 12 percent to $ 59.51, offering a quick return for activist investor Third Point, who took a stake last month and publicly agitated for the change, when Intel shares were trading below $ 50.
“Swan is a class act and has done the right thing for all stakeholders stepping down for Gelsinger,” Third Point founder Dan Loeb said in a Twitter post after the news was first reported. by CNBC.
Mr. Gelsinger previously spent 30 years at Intel, including as chief technology officer, before leaving just over ten years ago to join VMware’s former parent company, EMC.
“Pat is a proven technology leader with a distinguished track record of innovation, talent development and in-depth knowledge of Intel. It will pursue a values-based cultural leadership approach with a focus on operational execution, ”said Omar Ishrak, independent chairman of the board of directors of Intel.
“I am delighted to join and advance Intel at this important time for the company, our industry and our nation,” said Mr. Gelsinger.
Intel had wiped out about $ 60 billion from its market cap in 2020. The biggest shock came in July, shares fell 17% in one day after revealing it was 12 months behind in developing the new process technology needed to make its latest generation of chips.
Mr Swan, a former eBay executive, was promoted in January 2019, following the resignation from Brian Krzanich, who failed to disclose an affair with another employee.
Mr Swan was committed to making data, rather than personal computers, Intel’s strategic goal, as the technology industry’s growth engine shifted to cloud computing. Mr. Ishrak said Wednesday that Mr. Swan had made “significant contributions through this period of transformation for Intel.”
However, Apple’s announcement in mid-2020 that it would change its Mac away from Intel to an Arm-based processor of its own design showed that Intel still faces strong competition.
Nvidia’s planned $ 40 billion acquisition of Arm, the UK chip company whose designs power the vast majority of mobile devices, will only add to the pressure on Intel.