Beleaguered chip-making giant Intel last Wednesday announced that it is replacing its chief executive after two years on the job. The company is replacing fiscally minded Chief Executive Bob Swan with a technology-focused leader in current VMware (VMW) CEO, Pat Gelsinger. Intel stock jumped on the news while VMware sank,
Swan will remain chief executive until Feb. 15. He was chief financial officer at Intel when he was elevated to top job in January 2019. Swan had been interim CEO since June 2018 following the resignation of Brian Krzanich.
Intel said the leadership change was unrelated to the company’s financial performance. It expects its fourth-quarter 2020 revenue and earnings per share to exceed its prior guidance provided on Oct. 22. In addition, the company said it has made strong progress on its 7-nanometer process technology and plans to provide an update when it reports its fourth-quarter results on Jan. 21.
Gelsinger has more than four decades of technology and leadership experience, including 30 years at Intel, where he began his career. He has been CEO at VMware since September 2012.
Intel’s board of directors made the CEO change to help drive the company’s transformation from a maker of central processing units, or CPUs, to a maker of XPUs, a term it uses to encompass a broad range of processors including graphics processors and field-programmable gate arrays.
“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,” independent chairman of the Intel board, Omar Ishrak, said in a news release.
He added, “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.”
The company is using CES 2021 to start the new year on a positive note after stumbling with production and technology challenges last year. Intel stock sank 16.8% in 2020 while the Nasdaq index soared 43.6%.
The Santa Clara, Calif.-based company also last week introduced four new PC processor families targeting business, education, gaming and mobile applications. It debuted more than 50 new processors as part of its 11th Gen Intel Core series.
At a news conference at the virtual CES 2021 trade show, Intel Executive Vice President, Gregory Bryant said the new processors will turn up in more than 500 new desktop and laptop models this year.
“You won’t see a ‘one system fits all’ mentality from Intel and its partners,” Bryant said. “Only Intel can deliver this breadth and scale of designs, because we have deep technical partnerships with more than 150 companies around the world.”
In its video presentation, Intel said its PC processors outperformed those of rival Advanced Micro Devices (AMD). Plus, it said AMD lacked Intel’s hardware-based security features to prevent malware. Intel also said its Chromebook processors bested those from MediaTek in side-by-side comparisons.
Rosenblatt Securities analyst Hans Mosesmann was not impressed by Intel’s new central processing units. The CPU announcements “were roughly as expected” and amounted to incremental upgrades to the product lineup, he said in a note to clients. Mosesmann rates Intel stock as sell with a price target of 40.
