After corporate blunders and setbacks, Intel CEO Bob Swan ousts | GeekComparison

Intel Chief Executive Officer Bob Swan at an Intel press event for CES 2020 at the Mandalay Bay Convention Center on January 6, 2020 in Las Vegas, Nevada.
enlarge / Intel Chief Executive Officer Bob Swan at an Intel press event for CES 2020 at the Mandalay Bay Convention Center on January 6, 2020 in Las Vegas, Nevada.

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Intel replaces its CEO Bob Swan after a series of manufacturing setbacks and competitive blunders that have seen the veteran Silicon Valley company lose its crown as the best American chipmaker.

Swan, the former chief of finance who held the top position for just over two years, will be succeeded on Feb. 15 by former Intel veteran Pat Gelsinger, who is currently chief executive of VMware, the infrastructure software group.

The company made the move just days before Mr. Swan was expected to unveil Intel’s new manufacturing strategy, along with the company’s latest earnings.

Last July, Intel was overtaken by Nvidia as the most valuable chip company in the US after it delayed its next generation of chips due to manufacturing problems. Since then, Swan has been under pressure to decide whether Intel would invest further in making chips to compete with its rivals TSMC and Samsung, or outsource more production to them.

Shares in Intel opened more than 12 percent to $59.51, signaling a quick bounce back for activist investor Third Point, which took a stake and publicly called for change last month when Intel shares traded below $50.

“Swan is a class act and did the right thing for all stakeholders who stepped aside for Gelsinger,” Third Point founder Dan Loeb said in a Twitter post after the news was first reported by CNBC.

Gelsinger had previously spent 30 years at Intel, including as Chief Technology Officer, before leaving just over a decade ago to join VMware’s former parent company EMC.

“Pat is a proven technology leader with an outstanding track record of innovation, talent development and a deep understanding of Intel. He will continue a values-based approach to cultural leadership with a hyper-focus on operational execution,” said Omar Ishrak, Intel’s independent chairman of the board.

“I’m excited to rejoin and lead Intel forward at this important time for the company, our industry and our nation,” Gelsinger said.

Intel had wiped out about $60 billion of its market cap by 2020. The biggest shock came in July, when the stock fell 17 percent in a day after it revealed it was 12 months behind schedule in developing the new process technology needed to produce its latest generation of chips.

Swan, a former eBay executive, was promoted in January 2019 following the resignation of Brian Krzanich, who had not disclosed an affair with another employee.

Swan had promised to make data, rather than personal computers, Intel’s strategic focus as the tech industry’s growth engine shifted to cloud computing. Ishrak said on Wednesday that Swan has “made significant contributions through this period of transformation for Intel.”

However, Apple’s mid-2020 announcement that it would switch its Macs from Intel to an ARM-based processor of its own design showed that Intel still faced stiff competition.

Nvidia’s planned acquisition of Arm, the British chip company whose designs power the vast majority of mobile devices, will only add to the pressure on Intel.

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