Intel said Thursday that it has chosen its chief operating officer, Brian Krzanich, as its new CEO. He will steer the world's largest chipmaker in a world where PC sales are cratering while smartphones and tablets thrive.
Krzanich will replace Paul Otellini on May 16, at the company's annual meeting. Otellini had announced his decision to resign in November.
The 52-year-old Krzanich started at Intel Corp. in 1982 as a process engineer and worked his way up through the manufacturing side of the business to become COO in January 2012.
"His open-minded approach to problem solving and listening to customers' needs has extended the company's product and technology leadership and created billions of dollars in value for the company," Intel said in its announcement.
Otellini will be ending a nearly 40-year career with Intel, including an eight-year stint as CEO by the time he leaves. He joined the Santa Clara, Calif., company after graduating from the nearby University of California at Berkeley and worked his way up the ranks before succeeding Craig Barrett as CEO in May 2005.
The COO job is the traditional stepping-stone to the CEO post at Intel. Both Otellini and Barrett held that job before becoming CEO.
The change in command comes at a critical time for Intel. After thriving for decades as the dominant seller of PC microprocessors, the company is scrambling to prove that it can make chips that work well on smartphones and tablet computers.
Qualcomm Inc. and other chipmakers have been more successful in the mobile-device market so far, undercutting Intel's financial performance and standing among investors. Last year, both Intel's earnings and stock price fell by 15 percent from 2011, but sales of chips to business PCs and servers are helping prop up performance.
Analyst Doug Freedman at RBC Capital Markets said Krzanich is a safe, consensus pick for the CEO post, one unlikely to attempt a significant strategy change.
"We view Mr. Krzanich as very much focused on delivery of results over image or perception," Freedman said.
Intel's board wasn't entirely satisfied with Otellini's performance last year. To reflect its disappointment, the board's compensation committee trimmed the cash portion of Otellini's incentive pay by 19 percent from the previous year to $5.23 million.
The other internal candidates for the CEO post were Renee James, head of Intel's software business, and Stacy Smith, chief financial officer and director of corporate strategy. Intel promoted James to president on Thursday.
Intel's stock fell 14 cents to $23.85 in morning trading Thursday after the announcement.