Intel was too ambitious in trying to create a better class of processors in recent years, leading to major delays that have created an opportunity for competitors to grab more of the market for PC chips, the company’s new CEO acknowledged on Tuesday.
Bob Swan, in one of his first public appearances since being named permanent CEO in January, said Intel wanted to improve its manufacturing process to speed the performance of its chips, as it had done successfully many times previously. But the improvement, first expected to debut as early as 2015 , is now planned for the second half of this year.
The delay was “somewhat a function of what we’ve been able to do in the past, which in essence was defying the odds,” Swan said on Tuesday at Fortune’s Brainstorm Tech conference in Aspen, Colo. “At a time when it was getting harder and harder, we set a more and more aggressive goal. From that, it just took us longer.”
Swan took over as interim CEO in June 2018, at a difficult time in the chipmaker’s history. Though still dominating sales of processors for PCs and servers, Intel was struggling to move to the more efficient manufacturing process. Rivals Advanced Micro Devices and Nvidia, which relied on outsourced chip manufacturing that continued to improve, leapfrogged ahead.
Intel’s stock has barely budged since Swan was named CEO at the end of January and is up only 6% for all of this year. By contrast, AMD’s shares have gained 83% in 2019 and Nvidia is up 25%.
Prior CEO Brian Krzanich resigned in June 2018, after the company said it discovered he had a past “consensual relationship” with an Intel employee. After a seven-month search, in January, Intel’s board selected Swan as the CEO—only the seventh in the company’s 50-year history.
The new CEO, who was initially named interim when Krzanich left, has also been credited with improving morale at Intel. After finally getting the manufacturing delays out of the way, Swan says he set about improving the company’s culture.
“The short story is we learned from it,” Swan said. The next generation of manufacturing improvements will be ready in about two years, he said. Intel is internally emphasizing greater sharing of information between units. The goal is to “pull entire company together” through “more truth and transparency and the free flow of information,” Swan said.