Intel announced today that Bob Swan will step down as CEO on February 15, replaced by ex-Intel executive Pat Gelsinger.
Intel announced today that Bob Swan will step down as CEO on February 15, and former Intel executive and VMware CEO Pat Gelsinger will become Intel’s new top boss. The transition highlights the fact that Intel has been struggling to compete on chip design against Advanced Micro Devices and to compete with TSMC and Samsung on chip manufacturing. In recent years, Intel has lost the competitive advantage it had on those fronts for decades. Gelsinger’s appointment as Intel’s eighth CEO in its 52-year history could be a morale boost for the company’s engineers, who number around 70,000, as Gelsinger spent three decades at Intel as an engineer and then executive. In my opinion, it’s about time for this move, and I imagine it will be popular. I thought that Gelsinger should have been appointed CEO many years ago. He has a keen understanding of chip design (Epic Games CEO Tim Sweeney pointed out that Gelsinger cowrote the book Programming the 80386) and has a lively personality, an ease in speaking to crowds, and an ability to communicate tough concepts in speeches and interviews. Intel is still in good financial shape, as PC sales have been strong during the pandemic, and it will announce its fourth-quarter results on January 21 as scheduled. On that day, Intel will announce how it’s doing with its 7-nanometer manufacturing process technology (where circuits are seven billionths of a meter apart). Intel has had delays in its 7nm process (which compares to 5nm for others due to a difference in nomenclature) during the past year or so. Before that, under previous CEO Brian Krzanich, Intel had trouble getting its 10nm process on schedule. Intel is the largest U.S. semiconductor company that manufactures its own chips. Most others use foundries, or contract manufacturers, such as TSMC, with factories overseas. Intel’s major manufacturing plants are in the U.S., and so its prowess in chipmaking is closely scrutinized by the U.S. government, which considers chipmaking capability to be important for national security. But getting manufacturing in sync with chip design is critical for Intel, which has to spend billions to build and upgrade factories to be ready to churn out scores of millions of chips on time when chip designs are ready. Despite its troubles, Intel has managed to hang on to about 78% of the market share for x86 processors, according to market research. Rival AMD has made gains for three years, doubling its market share to 22% with sales gains in the billions of dollars. “Swan was dealt a difficult hand and 10-nanometer was already off the rails when he was appointed CEO,” Pat Moorhead, an analyst at Moor Insights & Strategy, said in a message. “I think it came down to investor pressure and impatience. Chip problems take years to address and while Swan accomplished a lot, it wasn’t enough.
