Intel’s CEO Choice Fuels Debate Over Chip Maker’s Future
Brian Krzanich’s appointment signals that Intel is staying the course at a time when bolder action is needed, some analysts say.When Paul Otellini announced in November 2012 that he was stepping down as CEO of Intel, some analysts saw it as an opportunity for the giant chip maker to bring in an outsider who was unencumbered by Intel tradition and could better steer the company into new growth markets. The lengthy search for Otellini’s replacement further fueled the speculation that for the first time, Intel would choose a CEO who did not come from its own ranks, with some outsiders—including ex-Motorola CEO Sanjay Jha—being named as possible successors. However, when COO Brian Krzanich was named the new CEO May 2 after a five-month search by the board of directors, the reaction in the industry was decidedly mixed and did little to stem the debate over the company’s future. Some analysts said that it made sense for Intel to promote from within, and Krzanich’s experience on the operations side of the company will help as Intel looks to build up a foundry business that will leverage the company’s massive manufacturing capabilities. Others believe that at an important inflection point in the company’s history—as it tries to make inroads into the mobile device space and to expand into other growth areas such as networking and software—that Intel missed an opportunity to make a bold move with a leader from outside its walls.
“We view the selection of Mr. Krzanich as the company staying the course and not a positive development,” Piper Jaffray analyst Auguste Gus Richard wrote in a research note. “In the post-PC era, the company needs to transform the company and culture to adapt to a changing landscape. We continue to believe Intel needs to license ARM and focus on becoming a direct-to-OEM foundry. Promoting the COO is doubling down on the manufacturing roadmap and does not address the issues the company is facing.”