The world's largest manufacturer of semiconductor products,
) recently announced the appointment of an internal expert, Brian
Krzanich, as its new chief executive officer, effective May 16,
The 52-year old Krzanich joined Intel in 1982 as a process
engineer. He climbed the ranks over the years and was appointed
as the COO in Jan 2012.
Krzanich will now be Intel's sixth chief executive and will
take his position at the company's annual shareholder meeting on
May 16, replacing Paul Otellini. Effective May 16, Krzanich's
base salary will increase from $700,000 in 2012 to $1 million
annually. Additionally, he will receive new equity awards valued
at $2 million.
According to sources, some investors were hoping to see an
outsider as the new CEO as some aggressive moves could help Intel
catch up with the mobile revolution. Hence, Krzanich's
appointment upset a few of them.
Despite being one of the largest chipmakers, Intel's main
business of making processors for PCs is seeing sagging demand.
This can be attributed to the increasing customer shift toward
tablets and hybrids. Though Intel is well ahead of its closest
Advanced Micro Devices
), its new products and even Ultrabook laptops have so far failed
to excite consumers. The majority of gadgets run processors based
ARM Holdings Plc's
) power-saving chip architecture.
Therefore, in order to expand the company's bottom line, we
believe Krzanich will have to find ways to move beyond the
traditional computer industry.
Krzanich said that he would help move Intel chips beyond
computers and mobile devices into more novel fields, including
wearable technology. The focus is on identifying future product
needs and increasing revenue base, rather than aiming at existing
smartphones and tablets.
The company hopes that Krzanich will be able to generate
fruitful results with his wide experience in manufacturing
technology. We believe Krzanich's appointment comes at a crucial
time for the company, which is gearing up for a transition to
larger wafers. The company is also gearing up to ship its
next-generation processor, Haswell, which is expected to be
Intel's first major success in the mobile segment.
Intel has a strong market position and technology lead, and
continues to show solid execution. Though the company's recent
results have been impacted by the weak PC market, we believe
Krzanich's expertise should help Intel to get back on the growth
Intel shares carry a Zacks Rank #3 (Hold). Another stock in
the sector that is performing well currently is
), which carries a Zacks Rank #2 (Buy).
ADV MICRO DEV (AMD): Free Stock Analysis
ARM HOLDNGS ADR (ARMH): Free Stock Analysis
INTEL CORP (INTC): Free Stock Analysis Report
STMICROELECTRON (STM): Free Stock Analysis
To read this article on Zacks.com click here.