Intel decision on CEO delayed, says analyst

The company's CEO is slated to retire in May. Piper Jaffray believes the decision on a new chief has been delayed -- a situation that could hurt Intel.

Intel needs a new CEO fast to take it beyond the traditional PC market, says Piper Jaffray.
Intel needs a new CEO fast to take it beyond the traditional PC market, says Piper Jaffray. Intel

Intel's search for a new CEO has been delayed, as the world's largest chipmaker struggles to narrow down the candidates, according to a research note today from Piper Jaffray.

"We believe Intel has narrowed down CEO candidates to two internal and one external, but the final decision appears to be slipping," according to a note today from Piper Jaffray analyst Gus Richard.

Richard believes the delay in selecting a candidate is hurting Intel because it needs to make major decisions about future businesses, such as contract manufacturing.

Intel has said it hopes to have a replacement by the time CEO Paul Otellini retires in mid-May -- which means the company still has roughly two months to meet that deadline.

"We're still aiming to get it done by the shareholder meeting in mid-May," said Intel spokesman Chuck Mulloy. "The process is under way, no glitches," he said.

Richard sees it differently. "Without a CEO Intel is, in our view, a rudderless ship driven more by external forces than internal decisions," he wrote.

Richard continued. "The most important of which is: will the company license ARM and improve its ability to be a foundry? We think any major decision like this will have to wait for a new CEO. The fact that the decision looks to be delayed is not a positive sign in our view."

As a side business, Intel is a chip foundry -- or contract chip manufacturer -- on a relatively small scale, with customers like Netronome, Achronix, Tabula, and most recently Altera.

But this side business could get much larger as its main PC business shrinks. To compensate for a smaller PC market, theoretically, Intel could expand its contract manufacturing business and make chips for large clients like Apple.

Separately, a chip industry source who spoke to CNET today said that Intel has narrowed the search to Brian Krzanich, Intel executive vice president and chief operating officer, David (Dadi) Perlmutter, executive vice president and general manager of the Intel Architecture Group and chief product officer of Intel, and Sanjay Jha, former CEO of Motorola Mobility.

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