Intel CEO Bob Swan to be replaced with VMWare's Pat Gelsinger

Intel (INTC) CEO Bob Swan is poised to step down from his role at the tech company as of Feb. 15, CNBC first reported Wednesday morning. VMWare CEO Pat Gelsinger (VMW) is set to take over the position. A source confirmed the move to Yahoo Finance.

The departure comes after Swan was named CEO of the company in January 2019, after earlier serving as interim CEO for seven months and as chief financial officer since 2016. Gelsinger has served as CEO of VMWare since September 2012. Prior to working at VMWare, Gelsinger was at Intel for 30 years and had been the company’s first chief technology officer.

Swan’s exit comes at the end of a difficult stretch for the semiconductor company, with Swan saying during the company’s last earnings call that 2020 had been “the most challenging year” in his career.

Over the past year, disruptions due to the COVID-19 pandemic compounded with the company’s own delays in producing its next generation of smaller, more powerful 7-nanometer chips. In mid-2020, Intel said initial production shipments of these chips would begin in late 2022 or early 2023, a year behind the company’s previous schedule, while competitor AMD (AMD) had already begun selling its 7-nanometer processors.

"Swan was dealt a difficult hand and 10nm was already off the rails when he was appointed CEO. I think it came down to investor pressure and impatience," Patrick Moorhead, president and principal analyst at Moor Insights & Strategy, told Yahoo Finance. "Chip problems take years to address and while Swan accomplished a lot, it wasn't enough. I am not foreseeing any major strategic changes with Gelsinger, but I do expect him to focus on the company's engineering culture and get it back to an execution culture."

Hedge fund manager Dan Loeb of Third Point applauded Swan for his decision to step down, saying in a Twitter post Wednesday morning that Swan “did the right thing for all stakeholders stepping aside for Gelsinger.” In late December, Loeb sent a letter to Intel’s board urging it to seek “strategic alternatives” as competitors including AMD, Samsung and Taiwan Semiconductor Manufacturing Co. (TSM) chipped away at Intel’s foothold in in the microprocessing manufacturing, PC and data center markets.

Shares of Dow-component Intel surged more than 8% shortly after the opening bell, while VMWare (VMW) shares sank more than 4%.

—

Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter: @emily_mcck

Read more from Emily:

• Credit Suisse boosts 2021 S&P 500 price target to 4,200 with more stimulus expected

• Private payrolls unexpectedly drop by 123,000 in December: ADP

• What happened in the economy in 2020

• These tech jobs may disappear in the face of automation

Find live stock market quotes and the latest business and finance news

For tutorials and information on investing and trading stocks, check out Cashay

Follow Yahoo Finance on Twitter, Facebook, Instagram, Flipboard, LinkedIn, and reddit.