The 59-year-old is both an obvious choice to lead America’s most iconic semiconductor company—he spent 30 years there earlier in his career—and a somewhat unorthodox appointment for a modern chief executive who wrote a book on work-life balance and developed a points system to help himself avoid staying late at the office.
Intel on Wednesday named the Pennsylvania-farm-boy-turned-engineer to succeed ousted CEO Bob Swan next month. The appointment marks a turning point for Intel as it battles market-share losses and weighs its strategic direction, including whether to remain both a designer and maker of chips when most rivals have specialized in one or the other.
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Mr. Gelsinger brings the kind of engineering background common at Intel, one of Silicon Valley’s pillars. Mr. Swan, a former financial chief, was only the second CEO in the company’s 52-year history not to have a technical background. He remains in his role until Feb. 15.
François Piednoël, a former Intel engineer who has criticized the company’s technical decisions and whose career at the chip maker overlapped with Mr. Gelsinger’s, called the new chief a good listener who understood technical problems and made informed decisions. “He is very good at building his confidence by seeking the experts’ opinions,” he said.
Mr. Gelsinger rejoins Intel after eight years at the helm of VMware Inc., a maker of business software, where he roughly doubled sales. The company’s software tools are a key ingredient in the growth of cloud computing, where customers do their digital work on remote servers—most of which contain Intel processors.
At VMware, Mr. Gelsinger didn’t shy away from difficult, company-altering decisions like the ones he could soon face at Intel. He abandoned the software company’s cloud-computing business and opted to profit through partnerships, including with industry leader Amazon.com Inc.
The Intel he rejoins is much larger than the one he left, but also a bit diminished. While its sales have doubled in the intervening time, Intel last year lost the title of America’s most valuable chip maker to graphics chip maker Nvidia Corp. Intel shares fell 17% last year, while Nvidia’s more than doubled as demand surged for videogames and other devices where it has an edge.
Intel’s biggest struggles recently have been technological, with repeated delays in rolling out new, more advanced chip technology that have led it to lose out to manufacturing rivals in Asia. Taiwan Semiconductor Manufacturing Co. and South Korea’s Samsung Electronics Co. have become top producers of the most advanced chips. Intel has said it is considering outsourcing production of its leading chips, a sharp break from precedent in what could be Mr. Gelsinger’s first big decision.
Growing up, Mr. Gelsinger loved to tinker with TVs, radios and other electronics and was a top student, according to a cousin, Ernest Gelsinger. An 18-year-old Gelsinger joined Intel in 1979. He rose up the ranks to become the company’s youngest-ever vice president at 30 and its first chief technology officer in 2001—effectively making him responsible for upholding Moore’s Law, which is named after one of Intel’s founders and posits that the number of transistors on a chip doubles roughly every two years.
Friends and associates describe Mr. Gelsinger as an analytical, driven and meticulous leader. Early in his career, during which he received engineering degrees from Santa Clara University and Stanford University, his smarts and confidence sometimes rubbed people the wrong way, though he softened those edges while at VMware, said David Yoffie, a longtime former Intel board member who has known Mr. Gelsinger since the 1990s.
“He’s learned how to be much more personable in those kinds of situations where in the past he might have been a little bit brusque,” he said.
In his three decades at Intel, Mr. Gelsinger played a key role in designing some of its most successful and lucrative chips, including the 386 and 486 processors that were the computational workhorses inside the personal-computer boom of the 1980s and 1990s. He helped pioneer USB ports and Wi-Fi, both of which are ubiquitous. Intel was seen as the standard-setter in chip technology. Now rivals such as Nvidia are more prized, and Apple Inc., after years of using Intel chips to power its laptops, dumped the company last year in favor of its own design.
Since leaving, Mr. Gelsinger was twice rumored to be an Intel CEO candidate when the job fell vacant, and both times said he didn’t want to come back. Intel said Thursday that the new CEO would receive a $1.75 million signing bonus and have a base salary of $1.25 million. He is also eligible for a performance-linked bonus that could top $3 million, as well as stock incentives. Mr. Gelsinger said in a memo to employees that he was excited about the technological opportunity.
Mr. Gelsinger’s return next month comes as chips have seen supercharged demand as the pandemic accelerates spending on digital tools and the chips that power them.
“To come back ‘home’ to Intel in the role of CEO during what is such a critical time for innovation, as we see the digitization of everything accelerating, will be the greatest honor of my career,” he wrote in an email Wednesday to Intel employees. Intel and VMware didn’t make Mr. Gelsinger available for an interview.
The task before him is likely to test Mr. Gelsinger’s emphasis on work-life balance. In his 2008 book “The Juggling Act: Bringing Balance to Your Faith, Family and Work,” Mr. Gelsinger described how he uses a points system to sort out how much he is home. He awarded himself two points for getting home before 5 p.m. but only one for returning by 6:15 p.m.
Mr. Gelsinger also has to contend with competitors that are bulking up. Nvidia plans to buy Arm Holdings, the British chip-design company, in what would be the industry’s biggest deal if it goes through. Longtime rival Advanced Micro Devices Inc. has said it plans to buy rival chip maker Xilinx Inc. in an all-stock deal valued at $35 billion.
Meanwhile, Intel is under pressure to slim down. Daniel Loeb, activist investor Third Point’s chief executive, has criticized Intel’s “failed acquisitions” and urged the company to consider divestitures. Mr. Loeb on Wednesday cheered Mr. Swan’s departure to make way for Mr. Gelsinger.
The new CEO also faces turmoil in Intel’s engineering ranks. Development problems with its new chip-making technology precipitated the departure of chief engineer Venkata “Murthy” Renduchintala last year and the appointment of new manufacturing and technology executives. The company also lost star chip designer Jim Keller, who left last June after two years.
Mr. Gelsinger has long turned to his faith to help confront business challenges. In his book, he said that a mentor, the fabled former Intel chief Andy Grove, encouraged him to read The Wall Street Journal. Mr. Gelsinger followed the advice. But when he noticed he sometimes read the Journal before picking up the Bible, he changed course. “I committed to never reading the Journal before finishing my daily devotional time; I’ll read God’s Bible before reading the businessman’s bible,” he wrote.
Mr. Gelsinger delivered a Zoom lecture in June for Workforce Ministries, a group devoted to promoting Christianity in the workplace. He said he has tried to apply lessons from Christian teachings to his leadership at VMware, overseeing employees like a pastor oversees congregants.
“Being a Christian CEO of a public company is an extraordinary experience and an opportunity that is one of the highest of my career as I look down on my church of 32,000 employees,” he said. His flock at Intel will be more than three times that size.
Write to Asa Fitch at [email protected]
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