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In what may be the least surprising development of tech news from 2021 to date, Intel announced Wednesday morning that CEO Bob Swan is leaving and will be replaced by VMware CEO Pat Gelsinger.
It’s a tough break for Swan, the former CFO who had a long and illustrative career in finance before becoming the surprise choice of Intel’s CEO almost exactly two years ago. All of Intel’s former CEOs, starting with Robert Noyce in 1968, had backgrounds in engineering and science or at least worked closely with engineers. Swan was an MBA whose career motto was “Finance isn’t about counting beans, it’s about helping beans grow.” You can forgive the Intel board, which failed to recruit more senior tech executives to take the job, for thinking that a leader with a completely different skill set might be the one. reply.
It turns out not.
Swan took over a struggling giant, as Intel struggled to perfect new technology to fit more transistors into each processing chip. A push to go from a scale of 14 nanometers to 10 nanometers, a microscopic spacing that would allow billions of additional transistors per chip, was already several years behind when Swan took over. Hitting the whip, he reorganized the business and tried to find the problems. Soon, the new CEO developed a promising story: Intel had tried to improve too too quickly in the move to 10 nanometers. The company would no longer make the mistake, as it was looking to pack even more transistors per chip at a 7-nanometer scale next, Swan promised.
Then came the shocking announcement in July that Intel had fallen behind on the 7-nanometer transition. As I was screaming here at the time, what just happened to Intel? But there were a few warning signs, including the sudden departure of chip design star Jim Keller and Apple. decision to give up Intel chips and rely on its own silicon for future Macs.
Gelsinger marks a return to a more technically savvy leader at Intel. The hiring must be extremely satisfying for Intel, as Gelsinger’s membership represents a return of the little wonder who grew up in the company but left to find a managerial position elsewhere and turned down openings to lead the company. company two years ago before Swan got the job.
Gelsinger began his career as a quality control technician at Intel, a job that helped him pay to go to college. As we explained in the datasheet a few years ago, a series of promotions marked him as the youngest of all time and for the first time. In 2001, he was named the first CTO in Intel history. But when a relatively young CEO Paul Otellini blocked Gelsinger’s path to the top, he left to join EMC, where he was made head of fast-growing software developer VMware. He was also a tireless philanthropist who focused on improving girls’ education in Kenya.
“Coming back to Intel as CEO during such a critical time for innovation, as we see the digitization of everything accelerate, will be the greatest honor of my career,” Gelsinger wrote to Intel employees in an email this morning.
Investors are certainly thrilled. Intel’s stock price remained stuck at no higher than the mid-1950s for about three years, but briefly climbed to over $ 60 on Wednesday morning. In addition to CEO news, Intel also said its fourth quarter results would be better than expected and the company had “made great strides” in correcting the 7-nanometer lag.
On occasion, acerbic analyst Stacy Rasgon of Bernstein Research has attempted to temper the glee somewhat. Gelsinger is a good recruit, Rasgon wrote this morning, but “the next three years or so (which will include guaranteed stock losses at AMD, customers moving to alternative PC and datacenter ecosystems, and one more slippage in the technology roadmap) are likely already set in stone, and there is little that Pat can do to change that.
We will see that.
Aaron Pressman
@ampressman
aaron.pressman@fortune.com
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