Rehiring Intel-Trained Technology Expert Instead of Financial Specialist
Focus on Potential Collaboration with Samsung Electronics
[Asia Economy New York=Special Correspondent Baek Jong-min] The world's largest semiconductor company, Intel, has abruptly replaced its Chief Executive Officer (CEO). The move is interpreted as an attempt to make a comeback by changing the CEO from a financial expert to a technology expert. Following the CEO replacement news, Intel's stock price surged.
According to the Wall Street Journal on the 13th (local time), Intel announced that it had dismissed CEO Bob Swan and appointed Pat Gelsinger, CEO of VMware, as the new CEO. This occurred after activist investment fund Third Point purchased shares and demanded changes at Intel.
Swan joined Intel as Chief Financial Officer in 2016, served as interim CEO, and had been CEO since 2019. Since then, Intel has struggled after failing to introduce the 7-nanometer process for manufacturing PC central processing units (CPUs). Intel has fallen behind its traditional competitor AMD and has been struggling against Nvidia, which has expanded into areas such as cloud computing and autonomous driving.
Recently, Third Point emerged as a major Intel shareholder and sent a letter calling for management changes, including selling some businesses or outsourcing design and manufacturing to Samsung Electronics or Taiwan's TSMC, causing a stir.
Omar Ishrak, Chairman of Intel's Board, explained, "The Intel board judged that it was the right time to replace the CEO to leverage Gelsinger's expertise in technology and manufacturing." Daniel Loeb, Chairman of Third Point, also welcomed the change, saying, "Replacing CEO Swan is a welcome move for Intel shareholders."
Pat Gelsinger served as Intel's Chief Technology Officer (CTO) during Intel's heyday in the mid-2000s. Before moving to data specialist EMC in 2009, Gelsinger worked as CTO, introducing the Core 2 Duo CPU and leading Intel's golden era. Intel's CPUs such as the 286, 386, 486, and Pentium were developed under his leadership. Concerns about Intel's weakening technological capabilities arose after Gelsinger's departure. This contrasted with competitor AMD's progress after appointing technology expert Lisa Su as CEO.
This CEO replacement is particularly notable as it comes at a time when Intel is expected to sign semiconductor foundry contracts with Samsung Electronics and Taiwan's TSMC.
Bloomberg reported that Intel is considering outsourcing CPU production starting in 2023 to TSMC or Samsung Electronics. It is anticipated that the outsourcing decision will be announced during the fourth-quarter earnings release scheduled for the 21st.
On this day, Intel forecasted that its fourth-quarter earnings would exceed the outlook announced in October and expected strong annual sales. It also emphasized progress in developing new CPUs.
The stock market welcomed the Intel CEO replacement news. On the New York Stock Exchange that day, Intel's stock price surged 9% compared to the previous day.
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