Intel Shakeup Sees Chief Engineer Depart After Next-Gen Chips Delayed

Intel Corporation INTC Chief Engineering Officer Murthy Renduchintala is leaving the company, in what is a major shakeup of the chipmaker's technology team.

What Happened

The California-based company's Chief Executive Officer Bob Swan announced Monday that the company’s technology, systems architecture, and client group teams would be reorganized immediately in light of Renduchintala's departure and report directly to him.

The technology development team would be headed by Ann Kelleher, manufacturing and operations by Keyvan Esfarjani, design engineering on an interim basis by Josh Walden, architecture, software, and graphics by Raja Koduri and supply chain by Randhir Thakur.

Renduchintala will exit his role on August 3. This is the second high-profile departure from the company in recent days. In June, Jim Keller, senior vice president in technology, systems architecture and client group, left  citing personal reasons. 

Keller’s departure was deemed significant by Rosenblatt Securities analyst Hans Mosesmann, who stated that whatever the microprocessor engineer was enacting at Intel wasn't working.

Why It Matters

Intel last week announced a delay in the launch of its next-generation 7nm products of more than six months. The company suffered two years of delay in its current 10nm chips, which is raising questions on the company’s business model.

Rival chipmakers Advanced Micro Devices, Inc AMD and Taiwan Semiconductor Mfg. Co. Ltd. TSM are deemed to be beneficiaries of the delay in Intel’s 7nm product. NVIDIA Corporation NVDA also stands to benefit as it increases 7nm accelerators for data centers.

BofA Securities analyst Vivek Arya said the Santa Clara, California-headquartered company is headed for earnings upwards of the $3 mark by 2023 and a CAGR of 43% by the same period.

The delay in 7nm Intel chips is thought to a major reason why Apple Inc AAPL is switching to its own silicon for its Mac range of computers, CNBC noted. 

Price Action 

Intel shares closed nearly 2% lower at $49.57 on Monday and further fell about 0.2% in the after-hours trading.

Photo by JiahuiH on Flickr