Brian Krzanich ousted as Intel CEO over 'violation of Intel's non-fraternisation policy'

Krzanich resignation accepted over consensual relationship with employee

Brian Krzanich has been ousted as CEO of the semiconductor giant today over a consensual relationship with an employee, contrary to the company's non-fraternisation policy. Krzanich tendered his resignation after the relationship was investigated by both internal and external counsel.

Chief financial officer Robert Swan has taken over as interim CEO with immediate effect.

"An ongoing investigation by internal and external counsel has confirmed a violation of Intel's non-fraternisation policy, which applies to all managers," claimed the company in a statement today.

Krzanich tendered his resignation in response. "Given the expectation that all employees will respect Intel's values and adhere to the company's code of conduct, the Board has accepted Mr. Krzanich's resignation," continued the statement from Intel.

The statement went on to reiterate the board's support for Intel's current business strategy and Swan's "ability to lead the company as we conduct a robust search for our next CEO".

Swan added: "Intel's transformation to a data-centric company is well under way and our team is producing great products, excellent growth and outstanding financial results. I look forward to Intel continuing to win in the marketplace."

Krzanich took over as Intel CEO from the late Paul Otellini in May 2013 following a 16-month spell as chief operating officer. Krzanich had joined Intel in 1982 as a process engineer at the company's fabrication facility in New Mexico. He worked his way up the company in various management roles, being appointed to manage the company's factories and supply chain in 2007.

But while Intel is expected to report record second-quarter revenues of approximately $16.9 billion shortly, the company is facing a number of rising competitive threats. These include much lower-cost ARM-based mobile CPUs, which dominate the smartphone and mobile markets and are threatening Intel in supercomputing, laptops and other core markets.

Meanwhile AMD's new Zen architecture is not only matching Intel at a lower price, but also taking market share in PCs, with Ryzen, and servers, with Epyc.

At the same time, Intel has fallen behind in terms of manufacturing, with the company struggling for two years to make the shift to 10nm process architectures.

In contrast, AMD's contract manufacturer GlobalFoundries has already shifted to 12nm and is on track to make a volume production move to 7nm early next year.

ARM-chip makers Samsung and TSMC, meanwhile, have already made the move to 10nm and will move into volume production of 7nm imminently, while also sketching out their roadmaps for 5nm and even 3nm.

On top of that, the company is looking to rapidly make good its technology deficit in GPUs, with a plan to release its first discrete GPUs in 2020. GPUs - known as maths co-processors many years ago - are becoming increasingly important in artificial intelligence and supercomputing.