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Intel CEO Bob Swan will step down on February 15, the company said. He will be replaced by Pat Gelsinger, CEO of VMware. Swan was appointed permanent CEO of Intel two years ago in January 2019. He initially assumed the role on an interim basis in June 2018 following the resignation of former Intel CEO Brian Krzanich.
Gelsinger, who previously worked at Intel for 30 years, will take on the CEO role at a crucial time for the chipmaker. Intel faces renewed competition in its portfolio. It took a heavy blow last year when Apple announced it would be ditching its Mac line of processors from Intel in favor of Apple’s own Arm-based designs. The first Macs based on Apple’s processors came out late last year with an overwhelmingly positive response.
Meanwhile, Intel is also facing competition from a newly reborn AMD, with Zen processors that provide competitive performance for gamers and professionals in desktop and laptop computers.
The company also announced that it was exiting the 5G phone modem market in April 2019, after Apple and Qualcomm resolved their long-standing patent and royalty infringement dispute. Intel then sold the majority of its smartphone modem business to Apple for $ 1 billion.
CNBC, which reported the news ahead of its official announcement, notes that Swan had been criticized for having primarily financial, rather than technical, training. Prior to working at Intel, Swan served as Chief Financial Officer of eBay and worked for venture capital firm General Atlantic. In contrast, Gelsinger began his career at Intel and was the company’s first CTO. CNBC reports that Intel stock rose about 10% on news of Gelsinger’s appointment.
The Wall Street Journal reports that Swan’s departure follows pressure from activist hedge fund Third Point LLC, which pushed the company to make sweeping changes.
“The Board of Directors is confident that Pat, along with the rest of the management team, will ensure a strong execution of Intel’s strategy to leverage its product leadership and take advantage of important opportunities to come as it continues to move from a processor to an XPU architecture, ”Independent Chairman of the Intel Board, Omar Ishrak, said in a statement, adding that the board appreciates Swan’s contributions to the company.
Update Jan. 13, 10:08 a.m. ET: Update with news of Intel’s exit from the 5G mobile modems business, as well as WSJSwan’s report follows pressure from an activist hedge fund.
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