LONDON – Intel Corp. Thursday (May 2) announced that veteran executive Brian Krzanich will replace Paul Otellini May 16 to become the sixth CEO in the history of the world's biggest chip vendor.
Krzanich, Intel’s chief operating officer since January 2012, was widely seen as the leading candidate to replace Otellini from the time Otellini's pending retirement was announced in November. Krzanich, 52, joined Intel in 1982 and held a number of
technical and executive management roles before being promoted to COO last year.
Also Thursday, Intel promoted Renee James to president. James, who had been serving as general manager of Intel's software and services group, will also assume her new role on May 16, joining Krzanich in Intel's executive office.
Prior to becoming COO last year, Krzanich had been a senior vice president in charge of Intel’s worldwide manufacturing. As COO, Krzanich retained responsibility for Intel's manufacturing operations, widely considered to be the company's most crucial asset.
"Putting an ops guy in charge reinforces Intel’s move to be more competitive and decrease its overhead, which it has been doing over the past coupe of years," said Jack Gold, president of research firm J. Gold Associates, in a statement circulated Thursday.
Gold said both Intel's board of directors and the financial markets want Intel to become a leaner company.
"This promotion sends the message it will continue to emphasize a 'lean and mean' approach to business," Gold said.
Christopher Danely, an analyst at JP Morgan, said the appointment of Krzanich could be a positive for Intel if he "changes its focus from trying to be a growth company to its core competency of manufacturing and returning cash to shareholders."
Danely, he also believes Intel should get more involved in the foundry business, said such a change in focus could result in higher margins if Intel decreased operating costs and capital spending by exiting businesses that it is not competitive in such as the wireless chip business,
We believe this would result in higher margins and cash generation via lower operating and capital expenditures driven by exiting businesses that Intel is not competitive in, are not synergistic, and have inferior/negative returns such as the wireless chip business, Itanium server chips and many of Intel's software businesses.