Intel ousts CEO
SAN FRAN C I SCO » Intel, a semiconductor pioneer, on Wednesday ousted its CEO, Robert Swan, as the company faces pressure from an activist investor and grapples with the loss of leadership in producing ultrafast chips.
The Silicon Valley giant said Swan, a finance specialist who has been CEO since January 2019, will be replaced in mid-February by Patrick Gelsinger, a former chip designer and 30-year Intel veteran who has led software maker VMware since 2012.
Intel’s board moved to end Swan’s tenure as the company grapples with the fallout from manufacturing problems that have ceded its longtime technology lead to production services offered by Taiwan Semiconductor Manufacturing Co. and Samsung Electronics. Factory innovations that pack more tiny transistors on each square of silicon allow computer chips to do more at a lower cost.
Intel has since lost a series of technical leaders, and its stock price has stagnated. Those issues recently prompted activist hedge fund Third Point to acquire a stake in Intel and press for big changes in its business. Third Point argued that Intel’s problems could force the United States to rely more heavily “on a geopolitically unstable East Asia” to power vital technology ranging from personal computers to data center hardware.
“Intel was built on the vision of engineering genius, and without the best talent, the current trajectory will not be reversed,” wrote Daniel Loeb, Third Point’s CEO, in a letter to Intel’s board last month.
The leadership change is designed to address that issue, returning an engineer to the top post. Gelsinger, who is 59 and joined Intel when he was 18, got his college education with the company’s help and swiftly rose in its technical ranks. He was the lead architect of the widely used 80486 microprocessor and managed development of 14 chip projects.
Gelsinger became Intel’s first chief technology officer and for years hosted the company’s annual conference for hardware and software developers. He learned management skills from Andrew Grove, Intel’s acclaimed former CEO.
Gelsinger has said he had turned down previous overtures about being CEO. At one point, he went so far as to get a VMware tattoo. But he relented this time.
“To come back ‘home’ to Intel in the role of CEO during what is such a critical time for innovation, as we see the digitization of everything accelerating, will be the greatest honor of my career,” Gelsinger wrote in a letter to Intel employees.
Intel declined to make Swan and Gelsinger available for interviews.
Many of Intel’s key leadership departures in recent years occurred under Brian Krzanich, the CEO who was forced out in 2018 after a consensual affair with a subordinate. But Intel suffered a blow last year when Jim Keller, a celebrated engineer who was helping to overhaul development processes, left the company.
Venkata Renduchintala, a former Qualcomm manager who had been trying to help Intel recover from its manufacturing problems, also departed in 2020 after Intel disclosed that its next production process would be delayed.
Swan, 60, is credited with helping to ease internal squabbling at the company, and spearheaded changes aimed at taking Intel into other markets, such as gear for cellular base stations. He also shed ailing businesses, selling a unit that designed wireless chips to Apple and another making a variety of memory chips to SK Hynix.