
Robert Galbraith/Reuters
Brian M. Krzanich, shown at Intel headquarters in Santa Clara, Calif., last year.
Brian M. Krzanich, who on Thursday was named Intelâs next chief executive, knows he faces a hefty challenge when he takes over the worldâs biggest maker of semiconductors.
The company that became a household name through its âIntel insideâ stickers on personal computers is still the king of PC chips. But that is a shrinking business, and Intel is a laggard in making chips for hot products like smartphones and tablets.
That has put Intel in a bind, as semiconductor competitors long under the thumb of the Silicon Valley giant have gained traction through relationships with mobile device leaders like Apple and Samsung.
But Mr. Krzanich (pronounced KREZ-nick), a 52-year-old company veteran who started with Intel as an engineer when he was 22, says he is cleareyed about the challenges and has a plan to stop his companyâs slide.
âI look at this world and see all kinds of devices connected to computers, and people connected to it all the time,â Mr. Krzanich said in an interview. âWe can bring things to companies that others havenât dreamed of.â
He even has a broader picture of Intelâs future, like imagining moving beyond todayâs popular mobile devices and into other gadgets in peopleâs homes and even into so-called wearable computing devices. âIf youâre just talking phones, youâre shooting behind the duck,â he added.
Last year, almost two-thirds of Intelâs $ 53 billion in revenue came from making chips for PCs, a market Mr. Krzanich acknowledges is ânot growing, letâs be honest.â
Last month, researchers at the information technology firm IDC said PC demand declined more than 13 percent annually in the first quarter, as buyers turned to mobile devices like smartphones and tablets. In the same period, IDC said worldwide tablet shipments were up 142.4 percent, while smartphone shipments were up 41.6 percent. The bulk of Intelâs remaining revenue came from chips for computer servers, a business Intel still dominates.
Mr. Krzanich, who is the companyâs chief operating officer and is an expert in running big chip factories, will become Intelâs sixth chief executive on May 16, succeeding Paul S. Otellini, who unexpectedly announced his retirement last November. Intel also promoted Renee James, the 48-year-old chief of the companyâs software division, to president on Thursday.
Some analysts saw the appointment of Mr. Krzanich as a signal that the company would increase investment in its manufacturing while chasing new customers with chips meant for mobile products.
âThe PC and server markets are so big, so important, that you canât take your eye off the ball,â said Doug Freedman, an analyst with RBC Capital Markets. Mr. Krzanich, he noted, âis very much about the results. He comes from a world of schedules and manufacturing.â
But Mr. Freedman also said, âThereâs a part of the investment community that would have preferred an outsiderâ to shake up the company. This was never likely at Intel, he noted, where employment shorter than a decade marks one as a newcomer. Intel said it considered both inside and outside candidates.
Mr. Krzanich was one of several internal candidates who made their final pitches to Intelâs board last weekend. Ms. James was also vying for the job, and Mr. Krzanich said the two had privately discussed working together, no matter who became chief executive.
âShe was a very viable candidate,â he said. âOur vision of a mobile, connected computing environment was so close, we saw together we could drive things faster.â
Though he would not detail his entire strategy in the interview, Mr. Krzanich said he saw no reason to reduce Intelâs spending on cutting-edge chip technology and manufacturing. âI fought for this job for a reason,â he said. âThe assets that made us great in PCs and servers are even stronger in the mobile and cloud world.â
In part, Mr. Krzanich says he believes he is carrying through on a plan thatâs already under way.
On Monday, for example, Intel will introduce a new version of its low-power Atom chip designed for communications products, where its market is negligible.
If successful, Mr. Krzanich will create an Intel markedly different from the past.
Under Andrew S. Grove, the executive who coined the unofficial company slogan, âOnly the paranoid surviveâ and led Intel to dominance in providing chips for PCs and servers, the company honed a business known for a few close relationships with partners like Microsoft, and then PC manufacturers like Hewlett-Packard and Dell. Those relationships and the fortunes of those companies have declined in recent years.
Today, Intel faces competition from Qualcomm and Nvidia in the manufacturing of chips for mobile devices. H.P. is showing off servers that use parts from five or more competitors.
Even Microsoft, once the other half of a relationship so close that pundits called the two companies Wintel, is working with other chip makers for its video game consoles and tablets.
This article has been revised to reflect the following correction:
Correction: May 3, 2013
A previous version of this article incorrectly spelled the surname of the departing president and chief executive of Intel. His name is Paul S. Otellini, not Ottellni.
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