Intel CEO Bob Swan is resigning amid the company’s struggles to improve its chip manufacturing processes.
Swan will be replaced by Pat Gelsinger, CEO of cloud computing company VMware, on Feb. 15. Gelsinger previously served as an SVP for Intel's digital enterprise group over a decade ago.
Intel’s statement on the change-up tries to portray the company as holding a strong position in the chip market. However, 2020 was a tough year for Intel as rival AMD won over PC users with Ryzen processors built with TSMC’s 7-nanometer technology. Apple also ditched Intel’s silicon in new MacBooks in favor of its own ARM-based chips.
Intel's struggles center around its inability to meet deadlines for 10-nanometer manufacturing process—and now the 7nm node. Last July, Intel announced that its 7nm process had a defect, forcing the company to postpone its launch until late 2022 to early 2023. The delay is now causing Intel—a US company that invests billions in chipmaking— to consider using an outside foundry, such as TSMC or Samsung, to produce its 7nm processors in the future. Intel is expected to make the decision this month.
As for Swan, Intel said his departure had nothing to do with the company’s financial performance. “In addition, the company has made strong progress on its 7nm process technology and plans on providing an update when it reports its full fourth-quarter and full-year 2020 results as previously scheduled on Jan. 21, 2021,” Intel said.
Nevertheless, the company’s 7nm delays prompted an activist hedge fund last month to send a letter to Intel Chairman Omar Ishrak urging that changes be made. “Intel has been stuck at its 14-nanometer node since 2013, while TSMC and Samsung both transitioned to 5-nanometer this year and are developing more advanced process geometries,” wrote Daniel Loeb, chief executive at Third Point. “Intel's plan to roll out its 7-nanometer node late 2022 or early 2023 will place the Company several years behind its Asian peers for at least the first half of this decade.”
Swan had a brief tenure as CEO. He was formerly Intel’s chief financial officer, but he became CEO in January 2019 after Intel’s previous CEO, Brian Krzanich, abruptly resigned. Swan will remain CEO until Feb. 15.