Intel CEO Bob Swan is stepping down on February 15, the company announced. He will be replaced by VMware CEO Pat Gelsinger. Swan was named Intel’s permanent CEO two years ago in January 2019. He initially took office on a provisional basis in June 2018, following the resignation of former Intel CEO Brian Krzanich.
Gelsinger, who previously worked at Intel for 30 years, will take over as CEO at a crucial time for the chip maker. Intel is facing renewed competition in its portfolio. It suffered a serious blow last year when Apple announced it would transition its Mac line from Intel processors to Apple’s own Arm-based designs. The first Macs based on Apple processors launched last year with an extremely positive response.
Meanwhile, Intel also faces competition from a recently resurgent AMD, with Zen processors that offer competitive performance for gamers and professionals on desktops and laptops.
The company also announced that it was exiting the 5G phone modems market in April 2019, after Apple and Qualcomm resolved their long-standing patent and royalty infringement. Subsequently, Intel sold most of its smartphone business to Apple for $ 1 billion.
CNBC, which reported the news before its official announcement, notes that Swan had faced criticism for having a largely financial, rather than technical, background. Prior to joining Intel, Swan served as chief financial officer at eBay and worked at venture capital firm General Atlantic. In contrast, Gelsinger started his career at Intel and was the company’s first chief technology officer. CNBC reports that Intel’s shares rose about 10% on news of Gelsinger’s appointment.
Wall Street Newspaper reports that Swan’s departure follows pressure from activist hedge fund Third Point LLC, which pressured the company to make radical changes.
“The board is confident that Pat, along with the rest of the leadership team, will ensure the strong execution of Intel’s strategy to build its product leadership and seize significant opportunities ahead, while continuing to transform from a CPU to architecture firm XPU, ”said Intel’s independent board chairman, Omar Ishrak, in a statement, adding that the board appreciates Swan’s contributions to the company.
January 13 update, 10:08 am ET: Updated with news of Intel’s departure from the mobile 5G modem market, as well as the WSJThe report that Swan’s departure follows pressure from an activist hedge fund.