Intel unveiled a big leadership change today that signals a return to its roots as the chip giant struggles to regain its old luster.

The company announced Wednesday that CEO Bob Swan is stepping down and will be replaced by Pat Gelsinger, VMware's CEO, who had served as the chip giant's first chief technology officer.

The change sent Intel shares rallying on Wall Street, seen as a smart move for the tech giant in the wake of production stumbles that weakened its market position. Gelsinger will take over on Feb. 15, the company announced.

"This is a great move for Intel," IDC president Crawford Del Prete told Protocol. "Intel needs to get back to its technology and manufacturing roots in order to compete in a changed landscape."

Intel's dominant position in the semiconductor market has taken a hit over the past year following a series of production missteps and more aggressive competition from archrival AMD.

Some analysts have argued that Intel's woes are due partly to Swan's background. Swan joined Intel in 2016 as chief financial officer under then CEO Brian Krzanich. He became interim CEO after Krzanich's sudden departure in June 2018, and was named permanent CEO in early 2019.

Unlike most of his predecessors — including Krzanich, Andrew Grove and Craig Barrett, who are all engineers — Swan's background is in finance. Under his leadership, Intel was rocked by production missteps that caused serious delays and enabled AMD to gain market share, especially in the data center market.

In July 2020, Intel shares plunged after the company announced that the rollout of its next generation products will be delayed. The company said it had encountered problems related to its 7-nanometer process, referring to the manufacturing technology based on the line-width on chips. It was a surprising announcement given Intel's track record in producing smaller and less expensive processors.

Intel's recent unprecedented manufacturing stumbles prompted some analysts to argue that the company needed a different leader. "They need a technical leader, and Bob is an accountant," Marty Wolf, president of Martinwolf M&A Advisory Firm, told Protocol.

But Bernstein analyst Stacy Rasgon said Intel's problems started before Swan took over, and praised his leadership at a difficult time for the tech titan.

"I don't think the issues that are there are Bob's fault," he told Protocol. "Bob is a very good general purpose CEO."

But he said an Intel CEO "has to have the background to be able to make decisions based on what he's hearing and Bob, by his own admission, doesn't have that background. He doesn't have any sort of intrinsic way to parse what he's hearing in order to make the call, one way or the other. … Is he the right guy to be leading the company when their technology moat is eroding? That's the core issue."

Gelsinger had spent 30 years at Intel before moving on to leadership roles at EMC and VMware. Rasgon called him "an admittedly good hire."

"He will be seen as a potential shot in the arm to attempt fixing both the company's technical, as well as cultural, issues," Rasgon said in a note to clients.

IDC's Del Prete echoed that point, describing Gelsinger as a "strong executor" who "created a stronger relationship between Intel and developers" during his time at the semiconductor company.

"I have always found Pat to be a strong, empathetic, modern leader," he said. "He is extremely well-regarded by his team and within the industry. He is a rare combination of having very strong technical, business and social skills that make him a rare approachable, technical business leader… He's a unique leader."

This story was updated throughout to include analysis of the news. Initial reporting by Shakeel Hashim.