Shares rise as tech company Intel replaces its chief executive

Intel CEO Bob Swan to Step Down in February

Intel appoints Pat Gelsinger as new CEO - Industry - News -

Bob Swan speaks during an Intel press event for CES 2020 in Las Vegas in January 2020.

Chipmaker Intel Corp said on Wednesday it would replace Chief Executive Officer Bob Swan with VMware Inc CEO Pat Gelsinger next month. Having previously worked at Intel before VMWare, Gelsinger became the company's first Chief Technology Officer. In the summer of 2020, Apple announced that it was severing its partnership with Intel to favor its own custom silicon instead.

The company's shares were up almost 10 per cent in early trading. Microsoft, another major Intel client, is expected to follow suit in the near future.

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.

The Santa Clara, California, company said on Wednesday that the change in leadership is unrelated to its financial performance a year ago, but the surprise shakeup followed several weeks of investor activism by hedge fund Third Point, which had pushed for big changes. "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, long the world leader in chip-making technology, has lost its manufacturing edge in recent years and is now debating whether to outsource some of it flagship central processor unit chips, or CPUs, slated for release in 2023.

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