Shares rise as tech company Intel replaces its chief executive

The computer company said Wednesday, Jan. 13, 2021, that Pat Gelsinger will become its new CEO, effective February 15.

Intel said its announcement is unrelated to its financial performance in 2020.

Chipmaker Intel Corp said on Wednesday it would replace Chief Executive Officer Bob Swan with VMware Inc CEO Pat Gelsinger next month.

Sources familiar with the matter told Reuters that Gelsinger had turned down the top Intel job before, and it was not immediately clear what had changed his mind.

In December, a major hedge fund with a one-billion-dollar stake in Intel, Third Point, issued a letter to urge Intel to take "immediate action" and shake up its business model to combat the mounting threats to the company. The delay is now causing Intel-a U.S. 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 also reported a year ago that its latest 7nm processors would be significantly delayed, while its main competitor, AMD, proceeded to capture valuable market share.

Gelsinger, a former Intel executive, has served as the CEO of VMware since 2012.

Intel Chairman Omar Ishrak said in a prepared statement that "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". Last July, Intel announced that its 7nm process had a defect, forcing the company to postpone its launch until late 2022 to early 2023.

Swan's finance background marked a shift for Intel, which has mostly had engineers at the top since its 1968 founding, though its fifth CEO was an economist.