Swan, acting interim CEO, Swan, tells the story of insiders


Intel Corp has made interim CEO Robert Swan's position permanent on Thursday, marking the first time that the chip maker has chosen a leader who has not risen through the ranks of the company, dropping Intel's shares and strengthening his rivals.

Swan, 58, who was previously Intel's chief financial officer, served as chief financial officer of eBay Inc. for nine years before working for private equity and joining Intel in 2016.

His career in corporate finance marks a radical break with the tradition of Intel, which is usually run by engineers who have spent decades in the business and have spent time at once in its microprocessor architecture and manufacturing activities.

Intel's shares fell 2.6% to $ 46.29 during the noon trading and shares of the competing chip companies rose.

Shares of Advanced Micro Devices Inc. jumped 6.7% and Nvidia Corp was up 4.1%, contributing to the nearly 8% rise in the Philadelphia Semiconductor index. Intel's shares were the biggest loser in the index.

Swan will be responsible for putting Intel 's manufacturing business back on track and battling new chip competitors that undermine Intel' s dominance over personal computers and data centers.

Swan told Reuters that Intel intends to continue manufacturing its flagship CPU chips, but remains open to third-party use to manufacture chips in more recent markets, such as chips for cars or artificial intelligence.

"It's a capital-intensive sector, and we still need to evaluate whether it's wise to manufacture for a given technology," said Swan. "In the arena of high performance computing, we simply think we are the best in the world."

Given the brevity of his mandate and his lack of experience in the manufacturing sector, many analysts felt that it was unlikely that he would be appointed permanent general manager.

Swan also said publicly that he was not interested in becoming the permanent CEO of Intel. Sources close to the case said that Swan had privately declared that he would accept the role if it was offered.

Swan has kept Intel 's profit in line with tight cost control, analysts said. He helped Intel's stock rebound after investors were frightened by a revelation in July that the company would miss the deadline for its latest-generation chips, although the stock has followed the tech sector towards down these next few months.

However, questions remain about Intel 's ability to commercialize its next generation of 10 – nanometer chips by the end of the year on personal computers and at the beginning of the year. next in the data centers.

"Swan is a rock-solid leader and financial manager," said Chaim Siegel of Elazar Advisors. "I guess the reason stocks are down is that investors may have hoped that someone with a greater concentration of operations would be able to help them through these transitions (chip making). ). "

Over the last few decades, the chip industry has seen a split between design and manufacturing. Companies such as Taiwan Semiconductor Manufacturing Co specialized in chip factories, while companies like Qualcomm Inc. specialized in chip design, but outsourced manufacturing to third parties.

Intel is one of the last companies to design and manufacture chips. But he lost his lead in manufacturing the world's smallest chip features for TSMC last year and faces a growing threat from rivals such as AMD and Nvidia who do not manufacture their own chips.

Swan will likely pursue Intel's last years strategy to identify areas where it could extend beyond its core processor chips, such as artificial intelligence chips, said analyst Stacy Rasgon. at Bernstein.

"Bob will keep the ship afloat, the ship is going where it is going," Rasgon said. "Let's hope there is no iceberg."

But Swan will have to face tough choices, like staying focused on businesses such as memory and modem chips that connect phones to wireless data networks. These companies have a much lower margin than Intel processors, said Rasgon.

Murthy Renduchintala, chief engineer of Intel and former leader of Qualcomm, and Navin Shenoy, head of the data center of Intel, have for decades been immersed in the details of the activity of analysts.

The media also said that the Intel board of directors was interested in Johny Srouji, the leader of Apple Inc., responsible for managing the growing number of custom chips in Apple devices. .

"People wanted a Microsoft-type ad, like (Satya) Nadella," said Joel Kulina, a Wedbush trader in Toronto. Nadella spearheaded a resurgence at Microsoft that said she was vying with Amazon.com Inc. and Apple to become the world's largest technology company.

"But what do we have?" The CFO, because the search for CEO has yielded no results, it's odd for a company like Intel to have a leader who has no technical training. Is a cost cutter. "

Swan told Reuters that his skills complemented those of existing Intel technologists, some of whom had been poached by competitors such as AMD in recent years.

"This company is extremely rich in technical talent, from the point of view of design and architecture as well as processes and manufacturing," said Swan. "My role, and my challenge, is how to release that technical talent to keep doing special things?"

Swan was temporarily in charge of the chip maker since last June, when Brian Krzanich had left his post after an investigation revealed that he had a consensual relationship with an employee in breach of the policy of the company. # 39; company. Swan will be the seventh CEO of 50 years of Intel.

Intel announced that Todd Underwood, vice president of finance, would be appointed interim chief financial officer as the company undertook internal and external research to find a permanent chief financial officer.