![]() Intel Chairman Andy Bryant is again hiring a chief executive - and again, it's catching him off guard. CEO Brian Krzanich unexpectedly quit Thursday after Intel discovered he had carried on a relationship with an Intel employee in violation of company policy. That sent Bryant and his colleagues on Intel's board scrambling, in urgent need of a new chief at a crucial moment in Intel's history. Intel shares fell more than 4 percent Monday morning, to $50.19, amid a broad tech selloff and unease following Intel's shakeup and an analyst's sharply worded downgrade. "We believe the lack of leadership will only add to the already growing uncertainty about Intel's long-term franchise," Nomura Instinet analyst Romit Shah wrote in a note to clients. He cut his rating on Intel to "Neutral" from "Buy" and reduced his price target on the stock from $60 to $55. It's been six years since Intel last went looking for a CEO, when Paul Otellini unexpectedly announced his retirement. Bryant, a veteran Intel executive who lives in Oregon, was the company's newly installed chairman and led a six-month search before hiring Krzanich. Lessons from that experience will undoubtedly influence who Bryant and the board choose this time. And his reflections on that experience may give some indication of his, and Intel's direction. "The thing we do better than anybody else in the world is process silicon," Bryant told The Oregonian/OregonLive in 2014. "You have to understand that. You have to understand the culture of the company. It is a difficult company to come into from the outside." Intel's in a very different place than it was four years ago, when the company was nursing its wounds from having missed the mobile revolution created by smartphones and tablets. Today's Intel is thriving thanks to its dominance in providing chips for the lucrative data center market, the company's most lucrative business. And with the PC market fading, Intel is looking toward new technologies, including artificial intelligence and self-driving cars, to drive its future. Potential candidates Some possibilities for Intel's next CEO Diane Bryant: Former Intel data center chief, now chief operating officer of Google Cloud Pat Gelsinger: Longtime Intel executive, now CEO of VMware Sanjay Jha: Former GlobalFoundries CEO Venkata "Murthy" Renduchintala: President of Intel's PC and manufacturing groups Navin Shenoy: Manager of Intel's data center group Bob Swan: Intel CFO, interim CEO Hock Tan: Broadcom CEO Yet Intel has lost its position as the world's largest chipmaker and has stumbled at its most elemental task, delaying the launch of its next generation of 10-nanometer microprocessor for years as it struggles to overcome persistent defects. Since Bryant is still chairman, his sense of what Intel needs will doubtless play a key role in choosing Intel's next chief. Intel said last week it will hire an executive search firm and look inside and outside the business. Intel inside? Intel has never hired an outsider to run the company. The company, which turns 50 this year, has only had six CEOs - and all of them were Intel lifers. Near the top of the list must be Navin Shenoy, manager of Intel's data center group. He's been with the company since 1995, previously led its business in the enormous Asian market, and served as Otellini's chief of staff. Intel could also choose a former insider. VMware CEO Pat Gelsinger was Intel's first chief technology officer before leaving in 2012 for VMware. Gelsinger appeared to rule that out last week, though, in response to speculation he could be Intel's next chief. "I love being CEO @vmware and (am) not going anywhere else," he wrote on Twitter. "The future is software!!!" Diane Bryant, Intel's former data center chief (and no relation to Chairman Andy Bryant), could be another inside/out candidate. She went on leave last year "to tend to a personal family matter" and never returned, opting instead for a top job at Google. Outside-in? During his time as CEO, Krzanich broke with tradition and remade Intel's executive ranks with outsiders. That means Intel has only a couple longtime employees to choose from if it wants an experienced candidate from inside the company. Intel installed Chief Financial Officer Bob Swan to run the company on an interim basis. He's a veteran finance executive, though he's been at Intel for less than two years and has no technical experience in chip architecture or manufacturing. Bryant is a former CFO, too, and might be predisposed to someone with the same outlook. But Swan told employees Thursday he did not want the CEO job, according to employees who heard him address the company in the hours after Krzanich's exit. On paper, the most logical candidate to take over as Intel's next CEO must be Venkata "Murthy" Renduchintala, whom Krzanich hired away from rival Qualcomm in 2015. Renduchintala's responsibilities have expanded in his three years at Intel, and he now holds the title of president of its PC business (which still accounts for most of Intel's sales) and its manufacturing group. Ambitious and assertive, Renduchintala arrived at Intel decrying "a lack of product/customer focus in execution that is creating schedule and competitiveness gaps in our products" in a memo he sent to his fellow executives. If Intel's board decides the company needs to continue shaking things up, Renduchintala has demonstrated he's happy to be the one to do it. "Dr. Renduchintala is a well-respected engineer but we think won't immediately convince investors that Intel can overcome its challenges," Nomura Instinet's Shah wrote Monday. He said he believes Renduchintala is the most likely choice. A true outsider? In his research note, Shah said he believes Intel needs to go outside for an experienced CEO. "We believe Intel needs to hire an external candidate such as Hock Tan at Broadcom or Sanjay Jha from GlobalFoundries that have a proven track record of driving shareholder value," Shah wrote. Bryant is, at least nominally, open to hiring an outsider - provided that person understands chip technology. "We did an extensive outside search," Bryant said four years ago. "And there were times in the process when I would have given odds that we would go outside. If I were guessing at the beginning I would have said more likely outside then inside." But Bryant made it clear that any outside hire needs to understand the specialized world of semiconductor technology. That's a fairly narrow pool, though both Tan, Broadcom's longtime CEO, and Jha, who led contract manufacturer GlobalFoundries until March, fit the bill. Whatever his or her background, Bryant said any CEO hire needs a demonstrated capacity to learn, adapt and understand Intel's unique culture. "This is a job no one is qualified for on day one," he said in 2004. "You need someone you think can get qualified as quickly as possible." -- Mike Rogoway | twitter: @rogoway | 503-294-7699 Read More Intel's CEO search: Here's what Chairman Andy Bryant seeks : https://ift.tt/2trilM8
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