Intel CEO Bob Swan is stepping down from his position, effective February 15, and will be replaced by VMware CEO Pat Gelsinger. Gelsinger will also join Intel’s Board of Directors and has penned a memo to Intel’s employees.
We spoke with Bob Swan last week about the company’s plan for the future. Engineers have historically led Intel, and Swan has been dogged by criticism in the investment community because of his roots on the industry’s financial side – he served as Intel’s Chief Financial Officer before taking the helm as CEO in January 2019.
Swan served as an interim CEO for seven months as Intel conducted an extended CEO search to replace the ousted Brian Krzanich. Famously, Swan reluctantly took the Intel CEO role after several months of remarking that he didn’t want the job.
Swan’s lack of technical acumen was thrown in stark relief as Intel struggled with problems with its 7nm node. The delay lead the company to announce that it would turn to outsourcing portions of its core logic components, a first for a company that built its empire on the strength of its manufacturing operations. The worsening state of Intel’s future node manufacturing recently led activist hedge fund Third Point to ask the company to explore “strategic alternatives,” like spinning off its fabs and/or divesting itself of unsuccessful acquisitions.
VMware CEO Pat Gelsinger was rumored to be up for the Intel CEO position during the previous search and has a storied 30-year history at Intel: He served as the CTO and Senior Vice-President and General Manager of the Digital Enterprise Group. Gelsinger has served as VMware CEO since 2012 and has served at EMC as the Chief Operating Officer in the past. Gelsinger released the following statement:
“I am thrilled to rejoin and lead Intel forward at this important time for the company, our industry and our nation,” said Gelsinger. “Having begun my career at Intel and learned at the feet of Grove, Noyce and Moore, it’s my privilege and honor to return in this leadership capacity. I have tremendous regard for the company’s rich history and powerful technologies that have created the world’s digital infrastructure. I believe Intel has significant potential to continue to reshape the future of technology and look forward to working with the incredibly talented global Intel team to accelerate innovation and create value for our customers and shareholders.”
“Pat is a proven technology leader with a distinguished track record of innovation, talent development, and a deep knowledge of Intel. He will continue a values-based cultural leadership approach with a hyperfocus on operational execution,” said Omar Ishrak, independent chairman of the Intel board. “After careful consideration, the board concluded that now is the right time to make this leadership change to draw on Pat’s technology and engineering expertise during this critical period of transformation at Intel. The board is confident that Pat, together with the rest of the leadership team, will ensure strong execution of Intel’s strategy to build on its product leadership and take advantage of the significant opportunities ahead as it continues to transform from a CPU to a multi-architecture XPU company.”
Intel’s press release also states that “the company has made strong progress on its 7nm process technology and will provide an update on its Jan. 21 earnings call.”
Swan will conduct Intel’s earnings call on January 21, and the company plans to provide an update on its progress with its own 7nm node and its chip outsourcing strategy. In our recent interview with Swan, he told us that it’s possible that Intel could license process node technology from a competitor, and use it in its own fabs.
Intel’s stock is up 13% on the news.