VMware’s CEO Pat Gelsinger Replaces Intel CEO Bob Swan

Intel announced Wednesday that CEO Bob Swan is stepping down effective Feb. 15 and will be replaced by VMWare CEO Pat Gelsinger, who will also join the Intel board of directors upon assuming the role. And in a surprise turn of events, today Intel’s stock was up about 10% after news broke prior to the announcement, though VMWare’s stock was down more than 5%. Swan was named CEO in January 2019 after serving as interim CEO for seven months.

Please note that today’s announcement is unrelated to Intel’s 2020 financial performance. Intel expects its fourth-quarter 2020 revenue and EPS to exceed its prior guidance provided on Oct. 22, 2020. 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.

During Swan’s tenure, Intel has suffered blows from competitors. Over the summer, Intel reported that its latest generation chips would be delayed while AMD’s were already shipping inside laptops. Apple announced in the fall that it will use its own proprietary chips in its Mac computers, breaking a 15-year partnership with Intel for its chip supplies.

Dan Loeb’s Third Point hedge fund in December urged Intel’s board to explore “strategic alternatives.” That came after Intel lost market share to competitors AMD, Samsung and TSMC. Third Point urged Intel to divest from “failed acquisitions” and criticized Intel for its “loss of manufacturing leadership.” The firm recently took a roughly $1 billion stake in Intel, according to Reuters.

Critics have pointed to the fact that Intel’s chief executive did not come from a technical background, having previously served as CFO. With Gelsinger, that will no longer be the case. Gelsinger previously worked at Intel, eventually becoming its first chief technology officer.

Intel said the announcement was separate from its financial results and said it expects fourth quarter 2020 revenue and earnings to exceed prior guidance. The company said it “has made strong progress” on its latest generation 7 nanometer chips, which it said it would discuss when it reports earnings on Jan. 21.

Pat Gelsinger’s Background

Pat Gelsinger is a highly respected CEO and industry veteran with more than four decades of technology and leadership experience, including 30 years at Intel where he began his career. Most recently, Gelsinger served as the CEO of VMware since 2012, where he significantly transformed the company into a recognized global leader in cloud infrastructure, enterprise mobility and cyber security, almost tripling the company’s annual revenues.

Prior to joining VMware, Gelsinger was president and chief operating officer of EMC Information Infrastructure Products at EMC, overseeing engineering and operations for information storage, data computing, backup and recovery, RSA security and enterprise solutions.

Before joining EMC, he spent 30 years at Intel, becoming the company’s first chief technology officer and driving the creation of key industry technologies such as USB and Wi-Fi. He was the architect of the original 80486 processor, led 14 different microprocessor programs and played key roles in the Core and Xeon families.