Intel’s outgoing CEO Bob Swan
David Becker/Getty Images
Intel has dismissed CEO Bob Swan, naming current VMware CEO Pat Gelsinger—the onetime chief technology officer of Intel—to take his place. The move is effective on Feb. 15.
Investors cheered the news Wednesday morning, sending shares of Intel (ticker: INTC) up 8.5%, to $57.74.
Swan had been CEO since January 2019, after serving in an interim capacity for seven months. Intel has struggled over that time. Shares are up 17% over the last two years, trailing the 46% gain for the S&P 500 and the 146% rise for the PHLX Semiconductor Index (SOX).
In the last year, Intel has suffered competitive losses to rival Advanced Micro Devices (AMD), manufacturing issues with new chips, and a public relations black eye when Apple (AAPL) decided to use its own Arm-based processor designs in its MacBook personal computers. Intel is believed to be planning a partnership with Taiwan Semiconductor (TSM) to help it address the manufacturing issues.
Last month, activist hedge fund manager Dan Loeb acquired a reported $1 billion stake in Intel and urged the company’s board to consider strategic alternatives.
Read More:Intel Has Fallen Behind Rivals and the Rest of Tech. Why Its Stock Can Rise Again.
With today’s CEO announcement, Intel also said that fourth-quarter revenue and profits will exceed prior guidance, and the company said it has “made strong progress” on its 7 nm process technology. The company will report fourth-quarter results on Jan. 21.
Gelsinger has been CEO of VMware since September 2012. Previously, he led EMC’s information infrastructure products business. For Gelsinger, the Intel move is a homecoming. Gelsinger spent 30 years at the company, serving as Intel’s chief technology officer and working on key technologies like Wi-Fi and USB. He was the architect of the 80486 microprocessor.
With his appointment to CEO, Gelsinger will join the Intel board. Gelsinger has a master’s degree from Stanford University, a bachelor’s degree from Santa Clara University, and an associate degree from Lincoln Technical Institute in 1979, all in electrical engineering.
“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,” Intel chairman Omar Ishrak said in a statement. “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.”
Gelsinger said he is “thrilled” to be coming back to Intel. “I have tremendous regard for the company’s rich history and powerful technologies that have created the world’s digital infrastructure,” he said in the press release. “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.”
News of Gelsinger’s departure from VMware (VMW) sent its stock down 5.9%. Dell, which owns a controlling stake in VMware, is down 6% on the news.
VMware named CFO Zane Rowe to succeed Gelsinger as CEO on an interim basis, and said in a statement that it has launched a search for a permanent successor.
Write to Eric J. Savitz at [email protected]
