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Intel CEO Brian Krzanich at the International CES trade show in Las Vegas. (GeekWire File Photo / Taylor Soper)

Intel this morning announced the resignation of CEO Brian Krzanich after the discovery of what the company called “a past consensual relationship with an Intel employee” in violation of the company’s policy. Krzanich, the company’s CEO for the past five years, will be replaced on an interim basis by Robert Swan, the company’s chief financial officer.

It’s the latest challenge for the chipmaker, which started the year in a firestorm over Meldown and Spectre, the widespread security flaws in the many of the world’s computer chips, and is now grappling with production problems on the next-generation of its processor designs.

Intel said in a news release this morning that the company was “recently informed that Mr. Krzanich had a past consensual relationship with an Intel employee.” It continued, “An ongoing investigation by internal and external counsel has confirmed a violation of Intel’s non-fraternization policy, which applies to all managers. 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.”

Krzanich was an early supporter of President Trump, a stance that set him apart from the rest of the technology leadership in Silicon Valley. But he resigned from the president’s manufacturing council last year after Trump’s comments on white supremacist protests in Virginia, and has kept a low profile on that front ever since.

Krzanich was also heavily criticized for selling as much stock as securities regulations allowed him to do following the discovery of the Spectre and Meltdown flaws last year, but before they were actually disclosed to the public early this year. He said the trade was part of a prearranged plan, but the optics, as they say, were not good.

The company is Microsoft’s longtime collaborator in the famed “Wintel” partnership, matching Windows PCs with Intel chips, but it has faced increasing competition on a variety of fronts as the world has shifted to smartphones and other devices. Intel controls the market for data center processors, shipping nearly 100 percent of the chips that power the servers used by cloud computing vendors and server makers, but plays a much smaller role inside mobile devices while the PC market continues its slow decline.

Shares of Intel fell 1.3 percent in early trading after the announcement this morning. As part of the announcement, the company said it will report a record second quarter, with $16.9 billion in revenue and earnings per share of 99 cents.

Intel Chairman Andy Bryant said in a statement, “The board believes strongly in Intel’s strategy and we are confident in Bob Swan’s ability to lead the company as we conduct a robust search for our next CEO. Bob has been instrumental to the development and execution of Intel’s strategy, and we know the company will continue to smoothly execute. We appreciate Brian’s many contributions to Intel.”

The company says it has begun the search for a permanent CEO, and will consider both internal and external candidates. One of the oldest companies in technology, Intel has always promoted from within when it has come to filling the top slot, and while breaking with that tradition would be a surprise, so was Krzanich’s exit.

Top external candidates might include VMware CEO Pat Gelsinger, who held many roles at Intel across a 30-year career before leaving to run the virtualization software company, or Renee James, the former Intel president and current founder and CEO of Ampere, a startup trying to challenge Intel in the data center with a chip based on a different design.

Developing story, check back for updates.

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