INTC Intel Corporation

By Tripp Mickle 

This article is being republished as part of our daily reproduction of WSJ.com articles that also appeared in the U.S. print edition of The Wall Street Journal (June 22, 2018).

The sudden exit of Intel Corp. Chief Executive Brian Krzanich for violating company policy is the latest in a string of high-level departures at the chip giant.

Diane Bryant, former head of Intel's data-center group, joined Google's cloud business late last year, while Kirk Skaugen, former head of client computing who was at one point seen as a CEO candidate, left the company in 2016 and is now with Lenovo Group.

"Given so much change driven by Mr. Krzanich, his departure could make succession planning and further transition challenging," analysts at Cowen & Co. said Thursday. The transition comes as it seeks to extend its dominance in PC chips into new frontiers in computing.

Two current Intel executives -- Venkata M. Renduchintala, known as Murthy, and Navin Shenoy -- are believed to have the inside track among internal candidates to succeed Mr. Krzanich, according to people familiar with the company's leadership.

Dr. Renduchintala, who previously worked at Qualcomm Inc., is Intel's engineering chief, overseeing development of traditional processors and the company's coming graphics chips. He recently took responsibility for manufacturing operations, which have been plagued with delays in producing the company's next-generation chips.

Mr. Shenoy currently oversees Intel's high-margin data-center business, and before that ran its PC business -- Intel's most dominant areas -- which both showed improved performance under his leadership, the people said.

Intel's strength in processing chips has come under pressure as graphics processors, primarily from Nvidia Corp., emerged as a workhorse for artificial intelligence. Intel in 2016 sought to address that market by buying Nervana Systems and Movidius, a pair of startups working on AI-focused chips. It recently launched an effort to make graphics chips to better compete with Nvidia.

Intel became more acquisitive under Mr. Krzanich. He built out Intel's business in data-center servers, supplying companies such as Amazon.com Inc. and Microsoft Corp. that are spending billions annually on cloud-computing facilities. A big chunk of that growth came from Intel's $16.7 billion deal for Altera Corp. in 2015 -- the company's biggest-ever acquisition.

Mr. Krzanich followed up his Altera buy with a big bet on the booming market for automotive-vehicle technology by spending $15.3 billion for Mobileye NV, a leader in sensors for assisted-driving features.

Mr. Krzanich also sought growth in others areas, beefing up Intel's position in outfitting a variety of household and industrial equipment with computing capabilities, a burgeoning business known as the Internet of Things. Intel has made a push in the market for cellular-communications chips, replacing Qualcomm Inc. units in a portion of Apple Inc.'s iPhones, and has made inroads on 5G cellular technology.

Mr. Krzanich pushed Intel into visibly high-profile areas such as augmented-reality headsets and competitive gaming known as esports. Some of these efforts fell short; the company, for instance, shut down several products designed for wearable computing, such as smartwatches.

Since Mr. Krzanich was named CEO in May 2013, Intel's share price has risen 123%, outpacing the S&P 500 but underperforming the PHLX Semiconductor Sector Index. Sales have grown nearly 18% between 2012 and 2018 to $62.76 billion. Last year, Intel held a 99% share of the most popular type of chips used in servers, and a 91% share of the processors found in PCs, according to Mercury Research.

Write to Tripp Mickle at Tripp.Mickle@wsj.com

(END) Dow Jones Newswires

June 22, 2018 02:47 ET (06:47 GMT)

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