Intel’s chief executive officer Bob Swan is stepping down in February.
In a statement, the company announced its board appointed Pat Gelsinger as its new CEO, effective Feb. 15. Gelsinger will also join the Intel board of directors.
The move follows weeks of pressure from activist investor Dan Loeb, who had criticized Intel for its “loss of manufacturing leadership.” Loeb’s hedge fund, Third Point, urged the company to explore “strategic alternatives” after losing market share to competitors AMD, Samsung, and TSMC.
According to a report from Reuters, Third Point recently took a $1 billion stake in Intel.
Swan, who was named CEO in January 2019, had been chief financial officer at the tech giant before being named interim CEO in 2018. His background in finance rather than in technology was only recently seen as a liability.
Gelsinger, who designed Intel’s 1990s-era 80486 chip, was previously chief technology officer at Intel. He has been CEO of VMware since 2012.
“After careful consideration, the board concluded that now is the right time to make this leadership change to draw on Pat’s technology and engineering expertise during this critical period of transformation at Intel,” said independent chairman of the Intel board Omar Ishrak.
In a note, BMO Capital Markets analyst Ambrish Srivastava said Gelsinger’s appointment was a “big step in the right direction.” Srivastava said Gelsinger “certainly has the background and experience to address and tackle many of the challenges over the long term. We hold him in very high regard from his prior tenure at Intel.”
In July, Intel’s share price dropped after it announced its next-generation chips’ release would be delayed by at least six months, citing a “defect mode” that resulted in “yield degradation.”
Intel’s stock price was up 7% following the news. Share of VMware was down more than 7% midday Wednesday.