(Bloomberg) — Intel Corp.’s search The search for a new CEO will focus more on outsiders, with the chipmaker considering candidates such as Marvell Technology Inc. (MRVL) executive Matt Murphy and former Cadence Design Systems Inc. (CDNS) CEO. Lip-Bu Tan, according to people with knowledge of the situation.
More Reading from Bloomberg
The company has hired executive search firm Spencer Stuart to help find a new CEO and is evaluating candidates, said the people, who asked not to be identified because the selection is private. This includes looking beyond Intel’s walls for talent – resting with culture.
This week’s sudden ouster of CEO Pat Gelsinger set off an urgent search for new leadership at a time when the chipmaker’s finances are reeling and its bottom line has been depleted by years of management turnover. Gelsinger took the reins three years ago, and since then has focused on a difficult, expensive effort to turn around the struggling company.
That didn’t give him time to revive one of Intel’s legacies – a high-level training program that used to give leaders to other industries. Currently, Chief Financial Officer David Zinsner and Vice President Michelle Johnston Holthaus are serving as interim employees.
Shares of Marvell slipped as much as 2.3% on Tuesday after Bloomberg News reported that Murphy was under consideration. Intel fell more than 5% as of 1:09 pm in New York, continuing the retreat that began Monday.
All but one of the company’s directors since its founding in 1968 have been at home, and the outsider, Bob Swan, was hired as a stopgap when the board was forced to fire Brian Krzanich. That game made the company stable for 50 years. Krzanich’s tenure also saw the departure of a number of Intel veterans.
As the board searches for Gelsinger’s permanent replacement, analysts say, it could be difficult to choose from within, perhaps because early exits mean there are few strong insiders. On the other hand, there is little hope that the company will be able to bring in an outside savior who can shake things up quickly.
“It would be difficult to find a replacement with the right experience and background, with the ability to manage an organization as complex as Intel and able to deal with many headwinds,” KeyBanc Capital Markets analyst John Vinh wrote in a note Monday. .
Pat Gelsinger
Intel declined to comment on potential candidates for the CEO role. Marvell, Murphy and Tan did not immediately respond to requests for comment. Reuters previously reported that 65-year-old Tan, who served on Intel’s board until earlier this year, was in conflict at work.
Another way to balance the inside-outside equation would be to hire a former Intel executive who left during the management crisis of recent years – like Gelsinger.
Such representatives include Stacy Smith, a former Intel executive who joined the company’s board this year. The former Intel CFO, who also spent time in the company’s sales team, left during Krzanich’s tenure in 2018 and had previously applied for the top job. A recent departure is Gregory Bryant, who ran Intel’s personal computer unit. He joined Analog Devices Inc. in 2022.
Also in this cohort is Ampere Computing LLC CEO Renee James, who created a startup that is trying to compete with Intel in server chips. He served as president of Intel until he was fired by Krzanich. Former CEO of Lenovo Group Ltd. Kirk Skaugen, who left Intel in 2016, led Intel’s server chip unit when it dominated the industry.
Another potential pool of recruits: Intel’s biggest customers, many of which have launched their own chip programs at various stages of development. Johny Srouji is the vice president of Apple Inc. The iPhone maker’s in-house program started a process that has been repeated elsewhere, most notably by Amazon.com Inc.’s AWS unit. Microsoft Corp., Alphabet Inc.’s Google and Meta Platforms Inc. they also built special chip teams.
Renee James
While Intel was trying to bring Gelsinger back to the company four years ago, other chip company executives, including Marvell’s Murphy, were said to be under consideration. Intel has now reached his latest search, the people said.
Despite the severe downturn in its economy, Intel remains one of the most important companies in the technology industry. It is still among the largest chipmakers by revenue, and more than 70% of the world’s desktop computers and server machines run on its processors. Its plan to build more factories in the US is the cornerstone of the federal government to make more chips on American soil.
Whoever Intel chooses, the new CEO will need time to make up for more than $20 billion of lost revenue to competitors over the past few years.
“On top of not being a benchmark, the new CEO coming to Intel is a multi-year gig that is longer in the technology cycle than ever before,” said Rosenblatt Securities analyst Hans Mosesmann.
Considering the technical nature of this industry – chip production and manufacturing requires a combination of electrical engineering, chemistry and physics that are often led by teams of Ph.Ds – Intel may hesitate to promote CFO Zinsner at all. When CFO Swan was the company’s interim president, analysts questioned whether he understood the technical side of the business well enough to make decisions.
Gelsinger, who was brought back to Intel after a 10-year absence, spoke of his commitment to the company’s past and his plan to restore its power. Now, that may no longer be a selling point. The need to quickly win over Intel’s competitors and turn them into customers for its outsourcing business may involve excluding longtime Intel acolytes.
If the board is looking for more immediate transfer of skills, Taiwan Semiconductor Manufacturing Co (TSM)., Advanced Micro Devices Inc. (AMD) and Nvidia Corp. (NVDA) would have been very bright talents. During the company’s last CEO search, AMD’s Lisa Su was named by many analysts. But since then, the company he runs has risen to a great level of success, taking market share from Intel and emerging as the top competitor to catch Nvidia in smart chips. AMD is currently worth more than twice as much as Intel by market capitalization.
Downloading from Nvidia can also be difficult. Co-founder and CEO Jensen Huang has created a unique management structure that eschews traditional hierarchy. Huang has many direct reports in a horizontal format, making it impossible to determine who among them would be the right step up – to Nvidia or to another company like Intel.
Taiwan’s TSMC, meanwhile, blew away Intel in manufacturing technology and made itself the leading chip maker for other companies. It makes the most advanced chips in the world, serving Apple, AMD, Nvidia and many others. At the headquarters in Hsinchu, executives seen as helping to guide TSMC’s meteoric rise include Intel veteran Kevin Zhang and his deputy Co-Chief Operating Officer Cliff Hou. In the US, TSMC Arizona CEO YL Wang recently achieved a remarkable victory, helping the plant achieve better yields than a similar building at home.
It’s unclear, however, whether TSMC’s top executives would consider jettisoning the global contract chipmaker to save the troubled company. But former TSMC Chairman Mark Liu, who spent the first years of his career at Intel and retired from the Taiwanese chipmaker as early as 2024, could be someone who could attract Intel – even if he is older than the average American CEO. Liu turns 70 this year.
“We do not expect it to be easy for Intel to find a new leader with the credentials to lead Intel out of this crisis,” Wolfe Research analyst Chris Caso wrote in a report. “Gelsinger came with a wealth of Intel knowledge, and there weren’t many people who could compete.”
