Intel announces its CEO Bob Swan is stepping down as the beleaguered chip maker stumbles

Intel has officially announced that its chief executive Bob Swan is stepping down on February 15, 2021, with its former executive and current VMware CEO Pat Gelsinger replacing him.

Swan is officially out

The news comes after Dan Loeb’s Third Point hedge fund had urged Intel’s board to explore “strategic alternatives” because Intel was losing market share to competitors AMD, Samsung and TSMC. According to Intel’s press release, Bob Swan will remain CEO until February 15, at which point Pat Gelsinger will take over the reins.

Gelsinger will also join the Intel board of directors upon assuming the role. Swan became Intel’s CEO in January 2019 after serving as interim CEO for seven months. While Swan previously served as finance chief, Gelsinger comes from a technical background, having previously worked as Intel’s first chief technology officer.

Gelsinger’s note to Intel

In a note to Intel, Gelsinger said that he will be sharing more about his vision and strategy for the embattled company in the near-term. “I know we can continue to accelerate innovation, strengthen our core business and create value for our shareholders, customers and employees,” he wrote.

I am thrilled and humbled to be returning to Intel as CEO. My experience at Intel has shaped my entire career, and I am forever grateful to this company. To come back ‘home” to Intel in the role of CEO during what is such a critical time for innovation, as we see the digitization of everything accelerating, will be the greatest honor of my career.

Gelsinger was just 18 years old when he joined the chip maker, fresh out of the Lincoln Technical Institute. His 30-year tenure saw him being mentored by former CEOs. The company also helped Gelsinger continue his education at Santa Clara University and Stanford University.

It would be an understatement to say that none of this was entirely unexpected.

Writing has been on the wall

Intel is the biggest casualty of Apple’s custom silicon development. As you know, the tech giant has pretty much shocked the industry and caught Intel on the wrong foot with the announcement of its own silicon for Mac computers. Apple plans to transition all of its Macs to in-house chips over the course of two years, including the powerful Mac Pro workstation.

While Apple will continue building Intel-based Macs for some time, in a few years all of its computers, iOS gadgets and other devices will be powered by its custom chips. This is a massive reputational blow to Intel, whose then-CEO Paul Otellini joined Steve Jobs on stage at the 2005 Worldwide Developers Conference to announce that Macs would be transitioning away from the use of PowerPC microprocessors.

And while the Apple account is responsible for just a few percent of Intel’s overall revenue, the Apple announcement has prompted its rivals to double-down on custom silicon. At the same time Intel is seen as playing catch-up to Apple and not even the latest Alder Lake chips announced at CES 2021 will change the notion that Intel is losing in this game.