In the latest shake up to Intel’s leadership, Intel’s favorite son Pat Gelsinger has been appointed by the company’s board of directors to lead the chipmaker, effective Feb. 15. He replaces outgoing CEO Bob Swan after just two years on the job.

Gelsinger spent nearly three decades at Intel and served as the company’s first CTO before taking over as president and COO of Dell EMC and most recently CEO of VMware.

“I am thrilled to rejoin and lead Intel forward at this important time for the company, our industry, and our nation,” Gelsinger said in a statement. “Having begun my career at Intel and learned at the feet of Grove Noyce and Moore, it’s my privilege and honor to return in this leadership capacity.”

The shakeup comes at a time when Intel faces intense pressure from rival chipmakers that have, in recent years, outpaced Intel in manufacturing node size. Additionally, Intel recently came under fire from activist investor Three Point LLC, which threatened to nominate new members to Intel’s board if the company didn’t take steps to shore up its competitive standing.

“Pat [Gelsinger] is a proven technology leader with a distinguished track record of innovation, talent development, and a deep knowledge of Intel. He will continue a values-based cultural leadership approach with a hyper focus on operational execution,” said Omar Ishrak, independent chairman of the Intel board, in a statement.

According to Gartner analyst Alan Priestley, Gelsinger has several challenges ahead of him when he takes over as CEO next month. The first and foremost is getting the company’s manufacturing process, which in recent years has lagged behind the chip fabs used by its competitors, back on track and optimizing the insource and outsource decisions.

“Intel is facing competition across its portfolio: a resurgent AMD in its core x86 business; validation of Arm-based designs for use in PCs; ease of use of design-your-own chips at hyperscale and large OEMs; Nvidia’s dominance as platform of choice for AI workloads; and Nvidia’s potential acquisition of Arm,” he wrote in an email to SDxCentral. “Given the challenges to its core business, Intel will need to continue to identify and ramp other segments — Mobileye, mobility-as-a-service, edge, industrial computing, etc. — and also identify new growth segments.”

Faced with these challenges, Priestley still believes that Gelsinger is well equipped to reposition Intel as a leader.

“It’s too early to really know how Pat’s return to Intel will affect the company’s direction. However, Pat is a former Intel CTO and has a strong technical background, being very conversant with Intel’s key markets, IT, manufacturing, and engineering capabilities,” he said.

During Gelsinger’s 30 years with he Intel, he helped architect the legendary 80486 processor, led 14 different microprocessor programs, and played key roles in the Core and Xeon families.

Priestley said that because Gelsinger has decades of experience working in the semiconductor, hardware, and software spaces thanks to his leadership of Dell EMC and VMware, he will be “very familiar with the challenges facing Intel’s major customers and their end customers, which will bring some new perspective to Intel’s senior management team.”

How the change in leadership will impact the company’s trajectory remains unclear. Last week, Bloomberg reported that Intel had entered into talks with rival chip fabs Taiwan Semiconductor Manufacturing Co. (TSMC) and Samsung to potentially produce the company’s CPUs.

Whether that will change under Gelsinger’s leadership remains unclear. In a release, Intel said the changeup was unrelated to the company’s financial position and promised to share more details regarding the chipmaker’s manufacturing strategy during its Q4 earnings call on Jan. 22.

Patrick Moorhead, principal analyst and founder of Moor Insights and Strategy, called Gelsinger’s hire a “good move” for Intel. “I am not foreseeing any significant strategic changes with Gelsinger, but I expect him to focus on its engineering culture and get it back to an execution culture,” he said.

And Moorhead isn’t alone. Wayne Lam, senior director of research for the Americas at CCS Insight, expects Gelsinger will embraced Swan’s strategy of outsource chip fabrication.

Today’s announcement marks the end of Bob Swan’s nearly 2-year tenure as CEO of Intel. Despite this, Moorhead argues that Swan was dealt a difficult hand. “10 nanometer was already off the rails when he was appointed CEO,” he pointed out.

Moorhead blamed Swan’s departure on investor pressure and impatience. “Chip problems take years to address, and while Swan accomplished a lot, it wasn’t enough.”

Priestley highlighted the fact that Swan was influential in diversifying the company’s portfolio and ending the company’s reliance on x86 processors as its core growth driver.

“Swan has done a good job in refocusing Intel, shifting it from being purely focused on its core x86 biz, and retargeting it at a $300 billion market opportunity, where it has scope for growth, rather than just its original PC, server focus,” he said.

In a statement, Swan said it had always been his goal to transition the company to a new era of distributed intelligence, and having done that, Intel is “now at the right juncture to make this transition to the next leader of Intel.”