Intel announced on Wednesday that CEO Bob Swan will step down on February 15 and be replaced with Vmware CEO Pat Gelsinger.
Swan joined Intel as a CFO in 2016, he was CFO at eBay for 9 years prior to joining. After previous CEO Brian Krzanich was fired in 2018, Swan took over as interim CEO for seven months. Swan became official CEO in 2019.
Gelsinger joined Intel when he was 18 and worked as the company for around 30 years, reaching the post of CTO. He left intel in 2009 and worked at EMC afterwards. He become CEO of VMware in 2012.
Gelsinger, in a memo to Intel employees, said: “I look forward to working with all of you to continue to shape the future of technology. While Intel's history is rich, the transformation from a CPU to multi-architecture XPU company is exciting and our opportunity as a world-leading semiconductor manufacturer is greater than it's ever been. I will be sharing more in the near-term about my vision and strategy for Intel, but I know we can continue to accelerate innovation, strengthen our core business and create value for our shareholders, customers and employees.”
The CEO changes come at a critical time for Intel, when it is facing criticism for a lack of progression in technology and some of its customers leaving. Intel is behind in its chip integration level to rivals TSMC and Samsung Electronics.
Apple, which uses Intel silicon for its PCs, announced its own CPU and launched a product with it. Amazon and Google are also developing their own data center chip to reduce reliance on Intel.
For the past year, Intel’s market valuation was also surpassed by Nvidia. Competitor AMD has narrowed its market share gap with Intel as well. While most semiconductor companies saw their share prices rise up to 50% in 2020, Intel saw it decline by 17%. Hedge fund Third Point in December asked Intel to get rid of its production unit and commence a reorganization.
Intel said its decision to change CEO was not made done in light of Third Point’s request but done is a board meeting. The board wanted a technology expert over a finance expert as CEO, the company said.
Intel’s share increased by up to 13% on Wednesday after the news of the CEO replacement broke. The company will announce its fourth quarter earnings on January 21.