Pat Gelsinger to replace Bob Swan as Intel CEO

Chipmaker says the move is unrelated to Intel's recent financial performance

Intel announced on Wednesday that its board of directors has selected Pat Gelsinger as the company's new chief executive officer.

Gelsinger will assume new responsibility on 15^th February 2021, succeeding Bob Swan, who became Intel CEO in January 2019 following the exit of previous head Brian Krzanich.

Intel has struggled under Swan's leadership, losing market share to rivals firms in major business segments while also experiencing manufacturing delays.

Intel however stated that the decision to replace Swan is "unrelated" to the company's financial performance.

"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," said Omar Ishrak, independent chairman of the Intel board.

"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," he added.

Gelsinger said he was "thrilled to rejoin and lead Intel forward at this important time for the company".

"Having begun my career at Intel and learned at the feet of Grove, Noyce and Moore, it's my privilege and honour to return in this leadership capacity."

Gelsinger is a highly respected CEO with more than 40 years of leadership experience in the technology sector. He has spent 30 years at Intel, including as the company's first chief technology officer. He has also served as the chief operating officer of EMC's Information Infrastructure Products division.

He has been the CEO of VMware for the past eight-and-a-half years, where he helped transform the firm into a virtualisation and software powerhouse. VMware's annual revenues have tripled since Gelsinger became CEO of the firm.

The leadership change at Intel comes after a letter to Intel from activist investor Dan Loeb of hedge fund Third Point regarding changes in the company's business strategy, according to Reuters.

Loeb pushed the firm to find new executives and to also hire an investment adviser to study "strategic alternatives" in efforts to regain market share from rival companies such as AMD, TSMC and Samsung.

Loeb also suggested Intel to consider divesting from failed acquisitions and to review whether it wishes to continue making all of its chips in-house.

In July, Intel said that it was delaying the rollout of its 7nm chips, due to a "defect mode" that was causing "yield degradation" in the chip manufacturing process.

The announcement meant that Intel's 7nm chips will not arrive until late 2022 or early 2023.

On Wednesday, Intel said that it has made "strong progress" in addressing issues with its 7nm chip manufacturing technology.

The company also expects its revenue and earnings to exceed prior guidance in the fourth quarter of 2020.