Intel Corp. has been trying hard to fill their most prominent role in the $400-billion chip industry for more than six months. But the company’s board still hasn’t found what they have been looking for.
according to people who are familiar with the process, The directors at Intel have ruled out some candidates for the vacant post of the chief executive officer, passed up obvious ones, have also rejected some of them and decided to go back and re-interview other candidates for the application, thereby extending the search.
Chairman Andy Bryant recently told some employees that the chipmaker might go along with a “non-traditional” candidate, which indicated that a CEO from outside the company might be a potential possibility.
Whoever will be chosen will have to take the reins of the company that is churning out record results, and is also facing rising competition. The new CEO will have the responsibility of convincing the investors that Intel’s loss of manufacturing leadership, which is a cornerstone of its dominance, will NOT cost them their market share in the lucrative semiconductor market. The CEO will also have to deliver the company’s promise of maintaining growth by winning orders which would be beyond personal computer and server chips.
Kevin Cassidy, an analyst at Stifel Nicolaus & Co. said- “The new CEO will have many difficult decisions to make in a short amount of time. The company could perform well in the near term due to good demand for PC and servers, but longer-term decisions and strategy are much needed by a CEO soon. Intel requires to fix manufacturing delays quickly or it might as well risk customers looking elsewhere for better performing chips.“
Intel has been scheduled to report their earnings on January 24. The board has been trying very hard to make its choice before the date. Possible candidates include Sanjay Jha, Anand Chandrasekher and Renee James who are no longer involved. An Intel representative declined to comment on the same process.
Bob Swan, Intel’s chief financial officer, will be taking the role of CEO on an interim basis and was also on CNBC last week wherein he discussed strategies like a full-time leader. But Swan repeated that he doesn’t wish to have that job permanently.
Semiconductor factories take a year or more to build, and it takes even longer to get their upgrades and design changes to actually start generating revenue. This aspect makes it difficult for companies as such to change course swiftly, which means going without a CEO for more than six months will be a concern for some analysts.
Matt Ramsay, an analyst at Cowen & Co. said- “They should be pushing harder to get a leader in place and then start taking decisions which will give visibility to the entire company as well as the customer base.“
Former CEO Brian Krzanich had been ousted on June 21 after the board discovered that he had an extramarital affair with an employee. Intel took two weeks shy of six months to decide and promote him to the top role in 2013 when the predecessor Paul Otellini announced that he would be retiring ahead of the schedule.
According to Neil Sims, a managing partner at recruiting firm BoydenFinding, finding a CEO could often take more than six months. He said that the typical range is four to eight months. Sims said- “As a California company, Intel faces additional diversity standards which are now in place. While the new legislation focuses on boards, I am confident that female candidates will be seen in a high priority for the search committee.”
There are several strong female candidates who have the potential to lead Intel, and this is rare development to see in an industry which has almost never promoted women to the roles of CEO.
Rival Advanced Micro Devices Inc. has been enjoying a resurgence under the Chief Executive Officer Lisa Su. James rose to the rank of president at Intel before he left Google to fund her own startup. Diane Bryant, the person behind Intel’s profitable data center business, also left Google recently. Under Krzanich, Intel has spent more money and tied executive pay with increasing diversity. The company also went on to claim progress towards their goals and has been the most vocal in regards to the subject in an industry which is still dominated by men. In a most recent diversity report, Intel touted improvements on their products. Females percentage in its workforce has gone up to 28.8 percent in 2018, which was 24.7 percent in 2015. This comprises of 23.9 percent of their technical staff and occupies 19.4 percent of leadership positions.