Rich Templeton, a Texas Instruments lifer who is currently the company's chief operating officer, will become its next CEO, the company said on Thursday.
Templeton, 45, will succeed Tom Engibous, who became chief executive in 1996 and ran TI during one of its broadest periods of expansion. The 50-year-old Engibous will remain as chairman.
The announcement surprised analysts, but it won't likely cause concern. Templeton is a well-known figure and has been credited with concentrating the Dallas-based company on digital signal processors (DSPs), which channel signals inside cell phones and communications equipment. He went to TI after graduating from Union College in New York in 1980.
"TI has very solid executive management. These guys have been at TI all of their adult lives," Jeff Bier, an analyst at BDTI, a firm that tracks the DSP business. Similarly, Engibous joined the company after college and became CEO when then-chief executive Jerry Junkins died.
"TI's board of directors has a rigorous succession-planning process, and the transition we're announcing today has been several years in the making. As chairman, I will continue to work for TI's success with an active and independent board that is committed to serving our shareholders, customers and employees," Engibous said in a prepared statement.
In December, TI said that it expected to report fourth-quarter revenue of between $2.6 billion and $2.8 billion and earnings of 25 cents to 27 cents per share.
Although TI makes a variety of components, it is currently best known for DSPs, microprocessors and other parts required to make them work. DSPs essentially compress data to conserve bandwidth in cell phones, cameras and industrial equipment. Real-world analog data--like sounds and light--are first converted into digital form by chips known as analog-to-digital converters. DSPs then try to maximize the number of digital packets a given device can handle at once.
Analog Devices is considered TI's closest competitor in DSPs, and Intel has been trying to take away some of its cell phone business.
"In the handset business they are huge. In the infrastructure business they are huge," Bier said "There is such a rich development environment, it is tough for other companies to compete"