The company stated that the decision to remove Bob Swan was "unrelated" to Intel's financial performance.
The noted computer-chip making company, Intel, will undergo a significant change in management as CEO Bob Swan will step down next month. He will be replaced by 40-year technology industry leader Pat Gelsinger
"Intel today announced that its board of directors has appointed 40-year technology industry leader Pat Gelsinger as its new chief executive officer, effective February 15, 2021," the company said in a statement issued on Wednesday.
"He will succeed Bob Swan," it added.
Though the company stated that the decision to remove Bob Swan was "unrelated" to Intel's financial performance.
The decision comes after a hedge fund company Third Point, led by activist investor Daniel Loeb sent a letter to the company about changes in its business strategy.
On Jan. 4, Swan met with Third Point Chief Executive Dan Loeb and Intel Chairman Omar Ishrak, according to a person familiar with the matter. Loeb pushed Intel to find new executives and potential new board members and held at least one follow-up meeting.
The hedge fund company in its letter stated that Intel 'should consider outsourcing its manufacturing operations to keep pace with rivals in the sector such as Taiwan-based TSMC and South Korean giant Samsung, among others.'
"We suggest the board retain a reputable investment advisor to evaluate strategic alternatives, including whether Intel should remain an integrated device manufacturer and the potential divestment of certain failed acquisitions," the letter added.
It is to be noted that even though Intel is the world's leading chip company, it is lagging behind its competitors in the fast-growing segment of mobile devices. Moreover, the leadership position in the chip-making avenue may be toppled by Apple in the near future as it is developing its own microprocessors for its Mac computers.
Gelsinger, the man replacing the current CEO, is currently CEO of software firm VMware but spent 30 years at Intel and also served as chief operating officer of EMC's Information Infrastructure Products division, the company said.
“Having begun my career at Intel and learned at the feet of Grove, Noyce and Moore, it’s my privilege and honor to return in this leadership capacity,” Gelsinger said in a statement. “I have tremendous regard for the company’s rich history and powerful technologies that have created the world’s digital infrastructure.”
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.
Intel on Wednesday also said that it expects to beat its financial forecast for the fourth quarter of 2020 and that it has made “strong progress” in addressing issues with its 7-nanometer chip manufacturing technology.
(With inputs from Reuters)
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