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Intel CEO Otellini Sees Successor Coming From Inside

Intel Corp. (INTC), the world’s largest computer-chip maker, is most likely to choose its next chief executive officer from among internal candidates, current CEO Paul Otellini said.

“It’s not up to me, but I think that’s the most likely outcome,” Otellini, 62, said at a Sanford C. Bernstein conference yesterday. “I’m very comfortable with the internal candidates.”

Intel said Nov. 19 that Otellini will retire in May, stepping down three years before the company’s mandatory retirement age. The same day, the company promoted Chief Operating Officer Brian Krzanich, Chief Financial Officer Stacy Smith and software head Renee James to the position of executive vice president, marking them as the primary candidates to lead the 44-year-old company. The chipmaker has never filled its top spot with an executive from the outside.

Intel rose to dominate the personal-computer processor business with industry-leading spending on its production facilities. While that eliminated almost all opposition over the years, under Otellini and his deputies, Intel has failed to make headway in chips for mobile phones and tablets. Those devices are now threatening the PC market as consumers turn to smartphones and tablets to get online.

“I don’t expect our strategy to change,” Otellini said yesterday. “I think the board is very comfortable with the strategy and assuming we stay inside, I think the management team is as well.”

Bringing in someone from outside would take that person two years to be able to understand Intel’s systems and culture no matter how talented they are, Otellini said.

“In this environment, why take the risk and take the time?” he said. “So my sense is that they will stay inside.”

Intel shares rose 1.4 percent to $20.14 at 10:02 a.m. in New York. Through yesterday, stock had dropped 18 percent this year.

To contact the reporter on this story: Ian King in San Francisco at ianking@bloomberg.net

To contact the editor responsible for this story: Tom Giles at tgiles5@bloomberg.net

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