Bob Swan will be stepping down two years after his promotion to the CEO position. The latest decision of ouster comes as Intel has been lagging behind in rolling out its next-generation chips and losing ground to its competitors.
On Wednesday, January 13, the stock of Intel Corporation (NASDAQ: INTC) surged nearly 7% closing at $56.95. The stock price surged on the news that the Intel CEO Bob Swan will be stepping down next month on February 15.
Current VMware CEO Pat Gelsinger and a 30-year veteran at Intel shall be replacing him. Interestingly, Vmware (NYSE: VMW) stock tanked 7% just after the news. Swan exits Intel just in two years of joining the company in January 2019. His exit from the company comes as Intel struggles to fix its manufacturing problems while losing a major part of its business to its rivals.
During Swan’s serving as the CEO, Intel suffered major blows from its competitors. During the summer of 2020, Intel reported a delay in the shipment of the latest generation chips. On the other hand, AMD was already shipping its chipset in the latest laptops.
Another major blow to Intel came when Apple announced its own proprietary chips for its Mac computers. This meant an end of 15 years of partnership by the iPhone maker. During December 202, Dan Loeb’s Third Point Hedge Fund urged Intel’s board to start exploring some “strategic alternatives”. This came as Intel was losing market share to AMD, Samsung, and TMSC.
Third Point criticized Intel for its “loss of manufacturing leadership” as well as “failed acquisitions”. The suggestions came after Third Point took a nearly $1-billion stake in the company. Following the news, Loeb said that it was the right thing to do for Swan.
Swan is a class act and did the right thing for all stake holders stepping aside for Gelsinger. https://t.co/lWdi5t41um
— Daniel S. Loeb (@DanielSLoeb1) January 13, 2021
Welcoming Pat Gelsinger Aboard
Pat Gelsinger is an old veteran in the tech space and well regarded as a chip-designer as well as the leadership world. About Bob Swan, the critics argued that he did not come from a technical background. This will no longer be the case with Pat Gelsinger.
Welcoming Gelsinger, Intel Executive Chairman Omar Ishrak said that he holds a “distinguished track record of innovation, talent development and a deep knowledge of Intel”. He further added that Gelsinger’s expertise will further help the company steer through a “critical period of transformation” from a “CPU to a multi-architecture XPU company”.
However, Intel has said that this announcement is different from its financial results. The chipmaking giant expects the fourth quarter 2020 revenue to exceed its prior guidance. The company said that it has made strong progress on its latest generation 7nm chips.
Bhushan is a FinTech enthusiast and holds a good flair in understanding financial markets. His interest in economics and finance draw his attention towards the new emerging Blockchain Technology and Cryptocurrency markets. He is continuously in a learning process and keeps himself motivated by sharing his acquired knowledge. In free time he reads thriller fictions novels and sometimes explore his culinary skills.
