Embattled Intel ousts its CEO
SAN FRANCISCO — Intel, a semiconductor pioneer, on Wednesday ousted 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.
Intel has since lost a series of technical leaders, and its stock price has stagnated. Those issues prompted activist hedge fund Third Point to recently acquire a stake in Intel and press for big changes in its business.
Gelsinger, who is 59 and joined Intel when he was 18, 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 faces daunting issues. One is how to respond to Intel’s manufacturing problems. The company already uses TSMC to make some products, but outsourcing some of its most important processors would be a blow to Intel’s image. The issue is expected to be addressed along with Intel’s fourth quarter financial results on Jan. 21.
Third Point has also raised the issue of whether Intel should continue to keep both design and manufacturing operations and whether it should spin off some unsuccessful acquisitions.
Intel also must counter invigorated competition from chip designers Advanced Micro Devices and Nvidia. Both exploit the advanced manufacturing services in Asia, and their share prices have surged while Intel’s has languished.
The management shift was widely viewed as positive, driving Intel’s shares up about 8 percent.