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Intel Might Wait for New CEO to Make Outsourcing Decision: Report

Pat Gelsinger

(Image credit: VMware)

According to a report from The Oregonian, current Intel CEO Bob Swan told Intel employees during an all-hands meeting that the company may delay its decision to outsource some of its core logic to outside firms until Pat Gelsinger, Intel's CEO-elect that will join the company in mid-February, has time to weigh in on the decision. “We expect to make that decision very soon,” Swan told employees, “but we’re going to do it with Pat.” Intel has not confirmed the report.

Intel had previously announced that it would unveil its plan, which will see Intel outsource the production of leading-edge CPU and GPUs to a competing fab for the first time in its history, during the company's Q4 2020 earnings call on January 21, 2020, saying "the company has made strong progress on its 7nm process technology." 

Incoming CEO Gelsinger was also a participant at the meeting, reportedly telling employees that "We have to deliver better products to the PC ecosystem than any possible thing that a lifestyle company in Cupertino [makes],” in reference to Apple, which recently began to transition to its own ARM-based M1 processors, severing its decades-long reliance on Intel chips for its PCs. “We have to be that good in the future,” Gelsinger noted. 

The news that Intel hasn't fully decided its outsourcing strategy could cool industry speculation that TSMC, which revealed a remarkable expansion plan today that includes $28 billion in additional CapEx investments in 2021, has already inked a deal with Intel. Intel has several options at its disposal. During a recent interview, CEO Bob Swan told us that the company could even use a competitor's process node technology inside its own fabs. Regardless of the strategy, Intel has communicated a sense of urgency around its decision, saying that potential partners will need to begin planning soon to meet Intel's target production dates. 

Gelsinger, who will take the helm as Intel CEO and join the board of directors on February 15, has a storied 30-year history with Intel. Gelsinger was the architect of the original 80486 processor. As Intel's first Chief Technical Officer, he created the company's tick-tock methodology and helmed the creation of 14 generations of Xeon and Core processors.    

Under the mentorship of then-Intel CEO Andy Grove, Gelsinger played a pivotal role in building the products that established the company as a dominant force in the semiconductor industry, working alongside industry legends like Gordon Moore and Robert Noyce. Gelsinger left Intel in 2009 for successful stints at EMC and VMware, and many have compared his return to Intel to Steve Jobs' return to Apple. 

Gelsinger was previously under consideration for the Intel CEO position in both 2013 and 2018 but stated both times publicly that he didn't want the job. Intel wooed Gelsinger away from his CEO position with a $116 million package, a nice step up from his current $42 million annual salary at VMware. Gelsinger's contract is heavily weighted towards performance incentives – he could make considerably more, or less, based on how the turnaround progresses.   

Paul Alcorn

Paul Alcorn is the Deputy Managing Editor for Tom's Hardware US. He writes news and reviews on CPUs, storage and enterprise hardware.