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Pat Gelsinger leaves VMware to replace Intel CEO Bob Swan

Written by 6 days ago

Tech giant leadership reshuffle sparks 8 percent rise in Intel shares

Intel is replacing its chief executive after only two years, but it has been a rough stretch for the chipmaker.

Bob Swan, who became the company’s chief executive in early 2019, will be replaced in mid-February by industry veteran Pat Gelsinger.

Shares spiked 8% on news of the change at the top.

The Santa Clara, California, company said on Wednesday that the change in leadership is unrelated to its financial performance last year, but the surprise shakeup followed several weeks of investor activism by hedge fund Third Point, which had pushed for big changes.

Intel acknowledged in late December that it had received a letter from the fund and was working with it on ideas “regarding enhanced shareholder value”.

In mid-2020, Intel disclosed that there would be a substantial delay in its development of a next-generation chipmaking process already in use by a major Taiwan supplier, TSMC.

The unexpected snag meant that Intel’s seven-nanometer  (7nm) processing technology is unlikely to be ready until the end of 2022 or early 2023, potentially putting the company behind its rivals.

On Monday, Intel pledged to ramp up production of Icelake this quarter, the data centre chip fabricated using its ten-nanometer (10nm) process. Though it did not specify the volume of Icelake processors it plans to manufacture through March.

Return of the Pat

Mr Gelsinger has been the chief executive of VMware since 2012 and has more than four decades of experience in the tech industry.

He spent most of that time with Intel Corp, where he began his career and was its first chief technology officer.

Mr Swan, a former chief financial officer at Intel, assumed interim leadership in 2018 after chief executive Brian Krzanich resigned after the company learned of what it called a past, consensual relationship with an employee.

After a search, Intel confirmed Mr Swan as chief executive in early 2019.

Intel chairman Omar Ishrak said in a prepared statement that “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”.

Meanwhile, VMware shares sunk 7 percent following the news of Gelsinger’s departure.

Gelsinger, who charged VMware to a 12 percent revenue increase during 2020, will be replaced by CFO Zane Rowe while the board and majority stakeholder Dell Technologies finds a replacement.

“I speak for the VMware Board of Directors, executive management and employees in expressing our gratitude to Pat for his leadership at VMware, and we are thrilled to keep him on as a member of the Board,” commented Michael Dell, Chairman of the Board at VMware.

 

Written by 6 days ago

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Intel VMware
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