Intel, Beneath Stress to Rethink Its Enterprise, Ousts Its Chief Govt

Intel declined to make Mr. Swan and Mr. Gelsinger available for interviews.

Many of Intel’s key leadership exits in recent years have occurred under Brian Krzanich, the company’s chairman, who was ousted from office in 2018 after a friendly affair with a subordinate. But Intel took a hit last year when Jim Keller, a famous engineer who helped overhaul development processes, left the company.

Venkata Renduchintala, a former Qualcomm executive who tried to help Intel fix its manufacturing issues, also left in 2020 after Intel announced that the next production process would be delayed.

The 60-year-old Swan is credited with helping ease internal disputes within the company and driving changes aimed at bringing Intel to other markets, such as cellular base station equipment. He also shed ailing businesses and sold a unit that developed wireless chips to Apple and another that made a variety of memory chips to SK Hynix.

However, analysts said he lacks the background to make difficult technical decisions.

“It takes years to fix chip issues, and while Swan has achieved a lot, that was not enough,” said Patrick Moorhead, analyst at Moor Insights & Strategy. He added that he expected Mr. Gelsinger “to focus on the company’s engineering culture”.

Mr. Gelsinger faces daunting problems. One is how to respond to Intel’s manufacturing problems. Alongside tech improvements, Swan signaled that Intel could take the radical step of going beyond its own factories for some of its flagship chips. The company already uses TSMC to make some products, but outsourcing some of its key processors would be a blow to Intel’s image. The issue is expected to be resolved along with Intel’s fourth quarter financial results on January 21st.

Third Point has also raised the question of whether Intel will continue to maintain both design and manufacturing processes and whether to spin off some unsuccessful acquisitions.

At the same time, Intel has to counter the strong competition from chip designers Advanced Micro Devices and Nvidia. Both take advantage of the advanced manufacturing services in Asia, and their stock prices have risen while Intel has declined.

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