Home Tech A look at Intel’s new CEO and the challenges he faces

A look at Intel’s new CEO and the challenges he faces

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Incoming Intel Corporation (NASDAQ: INTC) CEO Pat Gelsinger is returning back to the company he spent 30 years working at and investors are counting on the self-anointed “chief geek” to turn around the struggling company.

Change was needed

Intel confirmed Gelsinger as CEO on Wednesday and he will replace Bob Swan in February, The Wall Street Journal reported. Gelsinger comes at a time when the iconic tech giant is losing market share against smaller rivals.

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Intel is also in the middle of an identity crisis as it is trying to figure out if it is a designer of chips, a maker of chips, or both. By contrast, Intel’s rivals excel at one of the two — not both.

Swan also stood out in Intel’s history as only the second CEO in five decades of operation not to have a background in engineering. Specifically, Swan was promoted to CEO when he was serving as its financial chief.

By contrast, Gelsinger joined Intel in 1979 at the age of 18 and within 12 years he rose to the ranks of vice-president. Three years after that he was appointed as Intel’s chief technology officer.

Gelsinger excelled at staying true to “Moore’s Law,” a theory that dictates that the number of transistors on a chip should double every two years, according to WSJ.

Success story

Intel’s new CEO is described as an analytical, driven, and meticulous leader, according to WSJ. He oversaw many successful launches throughout his career at Intel, including the 386 and 486 processors that were vital in powering the personal-computer exploding in the 1990s.

He also played a very senior role in developing USB ports and Wi-Fi technologies.

He left Intel in 2012 to serve as CEO of VMware, a maker of business software. His leadership helped the company not only double sales but steer the company in the right direction. He decided to scrap VMware’s cloud-computing business and focused on generating profit through partnerships.

Challenges ahead

Gelsinger left Intel when it was the most valuable chip maker but now that title has been passed to Nvidia. In fact, Nvidia and other rivals are moving fast to capitalize on Intel’s weakened position.

Nvidia is looking to acquire Arm Holdings as what could be the industry’s largest M&A deal in history. Smaller rival Advanced Micro Devices is looking to acquire Xilinx as part of a $35 billion deal.

Gelsinger will also need to contend with activist investor Dan Loeb who vocally criticized certain aspects of Intel and its “failed acquisitions.” But the incoming CEO has the support of Loeb — although the support will need to translate to tangible results.

Finally, Intel has been bleeding talent over the years and the new CEO will need to fix this. Most notably, Chief Engineer Venkata Renduchintala left the company last year along with expert chip designer Jim Keller.