Intel struggles to find new CEO
Intel has been trying to fill the most prominent role in the $400bn chip industry for more than six months. The company’s board still has not found what it is looking for.
Intel has been trying to fill the most prominent role in the $400bn chip industry for more than six months. The company’s board still has not found what it is looking for.
Intel directors have ruled out some candidates for the vacant CEO post, passed up obvious ones, been rejected by some and decided to go back and reinterview others, extending the search, according to people familiar with the process.
Chair Andy Bryant told employees recently that the chipmaker may go with a “nontraditional” candidate, suggesting a CEO from outside the company is a possibility.
Whoever is chosen will take the reins at a company that is churning out record results, but is facing rising competition. The new CEO will have to convince investors that Intel’s loss of manufacturing leadership — a cornerstone of its dominance — will not cost it market share in the lucrative semiconductor market. He or she will also have to deliver on Intel’s promise to maintain growth by winning orders beyond personal computer and server chips.
“The new CEO will have many difficult decisions to make in a short amount of time,” said Stifel analyst Kevin Cassidy. “The company can perform well in the near term due to good demand for PC and servers, but longer-term decisions and strategy need a CEO soon.”
Intel needs to fix manufacturing delays quickly or risk customers looking elsewhere for better-performing chips, Cassidy said.
Intel is scheduled to report earnings on January 24. The board is trying to make its choice ahead of that date, according to one of the people.
Bob Swan, the company’s CFO, is filling the CEO role on an interim basis.
Semiconductor factories take a year or more to build, and it takes even longer for upgrades and design changes to start generating revenue. That makes it difficult to change course swiftly, so going without a CEO for more than six months is a concern for some analysts.
“They should be pushing to get a leader in place and then making decisions to give visibility to the whole company and the customer base,” said Matt Ramsay, an analyst at Cowen.
Former CEO Brian Krzanich was ousted on June 21 after the board discovered he had an extramarital affair with an employee. It took Intel two weeks shy of six months to decide to promote him to the top role in 2013 when predecessor Paul Otellini announced he was retiring ahead of schedule.
Finding a CEO can often take more than six months, according to Neil Sims, a managing partner at recruiting firm Boyden. The typical range is four to eight months, he noted.