Intel has announced that CEO Paul Otellini will step down on 16 May, to be replaced by the COO Brian Krzanich. Intel’s share value dipped slightly after the announcement that Krzanich would replace Otellini, but has since rallied and is steadily gaining.
While Otellini is very much a businessman – he has a bachelor’s degree in economics and an MBA, and joined Intel as a manager in 1974 – Krzanich has a degree in chemistry, and joined Intel as a process engineer in 1982. Krzanich has quite literally worked his way all the way up, from basic manufacturing positions, to his first major leadership role as manager of Fab 17 in 1997, to General Manager of Manufacturing and Supply in 2007, to his eventual rise to COO in 2012.
Apparently, according to some sources, Krzanich first stuck his head above the crowd when he devised the 0.13 micron (130nm) CMOS process, which would be used to build such chips as the Tualatin Pentium 3 and Northwood P4.
In short, then, Intel will have an engineer at the helm – but is that a good thing? According to many analysts, promoting the COO to CEO was a safe bet – and indeed, Krzanich takes the exact same path as his predecessors, Otellini and Craig Barrett, who were both COO before becoming CEO. Analysts expect Krzanich to mostly stick to the plan, and not attempt a major strategy change. The question is, does Intel need a safe bet, or does it need a CEO with a little more pizzazz?
This change in leadership at Intel comes at a critical juncture. After decades of being by far and away the largest computer chip maker, the last couple of years have been tricky for Intel. In essence, Intel missed the smartphone and tablet boat, ceding massive amounts of territory to mobile chip makers such as Qualcomm. At the same time, the PC market – Intel’s utterly, ridiculously massive cash cow – has declined.
Intel has been racing to catch up, and Bay Trail’s release in the autumn should finally prove that it can compete in the mobile space. Will Krzanich keep Intel on the path outlined by Otellini, or will he try something different? Otellini’s choices look like they will eventually pay off, but on a longer timeline than many would hope. When you’re talking about chip designs and process nodes that take years to design and implement, though, nothing happens too quickly.
It will also be interesting to see whether Krzanich takes Intel further down the foundry path or not. Intel has been pumping up its foundry business over the last year, and there’s a persistent rumour that it might try to snatch up a big customer, such as Apple.
There are some who think that this would be akin to Intel shooting itself in the foot, though – a much better solution would be to improve its own mobile chips, and then get Apple to switch from ARM to x86. After all, as Intel’s mobile boss says, ARM is not intrinsically more efficient than x86; it’s just that ARM chip makers have been focusing on efficiency for years, while the Intel oil tanker is only now reorienting itself towards ultra-low-wattage chips.
Krzanich has a fun few years ahead of him, that’s for sure.