Intel's Krzanich pledges stronger mobile push in his first speech as CEO

He takes over from Paul Otellini, who retired

Intel CEO Brian Krzanich admitted Thursday in his first speech in that role that the company has been weak in smartphones and tablets, but aims to improve by advancing chip and manufacturing technologies.

Intel's main focus is to produce more power-efficient chips, as it also adds features for connectivity and security, Krzanich said during a speech at the annual shareholder meeting in Santa Clara, California.

"We see that we've been a bit slow to move in the space," Krzanich said of the mobile market. "We're well positioned already and the base of assets we have will allow us to grow much faster in the area."

Krzanich was introduced as the company's new CEO at the meeting, replacing Paul Otellini, who announced last November that he would retire after four decades with the company, including eight years as CEO. Analysts have said Krzanich will be a steady, if not dynamic, leader for Intel. Krzanich has worked across units and has good knowledge of the company's operations, so he will be able to drive Intel's advances in mobile, manufacturing, PCs and the data center.

Krzanich, who was formerly Intel's chief operating officer and vice president, was chosen over a number of other candidates who were considered for the post. One of those candidates was Renee James, who took over as Intel president on Thursday. James was formerly senior vice president and general manager of software and services.

Intel was late to the mobile market under Otellini's watch, which gave processor designer ARM an insurmountable lead. While ARM's processors are used in most smartphones and tablets, Intel's mobile Atom chips are in just 12 smartphones and 15 tablets, but that number is expected to grow.

Chips based on the recently announced Silvermont architecture will be Intel's next step in Atom development. Silvermont is one of the biggest chip architecture advances in Intel's history, said Krzanich, who previously ran the company's Technology and Manufacturing Group, which with more than 50,000 employees is close to half of Intel's total 105,000 employees.

Chips based on Silvermont will be up to three times faster and five times more power efficient than their predecessors. The roster of upcoming Silvermont-based Atom chips includes Bay Trail, which will be in tablets late this year, and Merrifield, which will be in smartphones in the first half of next year.

Starting later this year, Intel will also integrate LTE into Atom chips, which would be a big boost for the mobile business, Krzanich said. The LTE chips will come from Intel's 2010 acquisition of Infineon's wireless assets.

"That really opens up the market for our phones and connected devices," Krzanich said.

The mobile improvements are tied to manufacturing advances made every two years by Intel. Intel is able to make chips smaller, faster, feature-rich and more power efficient with each process upgrade. A move to the 14-nanometer node is scheduled for early next year.

Intel is also due to release high-performance fourth-generation Core processors code-named Haswell for PCs early next month. Haswell's lowest power consumption will be single digits, giving PC makers flexibility on how they design products, Krzanich said. That move fits with the increasing number of hybrids, which can be used as laptops or tablets.

The growth in mobile will also augment the data center business, which is a profit driver for Intel as PC shipments shrink. Intel deals in server chips and networking and storage equipment. As the number of connected devices grows, companies will be able to process more data and provide more services for mobile devices.

"It's about providing answers as you increase the data rate available to you," Krzanich said.

In welcoming Krzanich as CEO, Intel also bid farewell to Otellini, who was presented with a 300-millimeter wafer in a plaque signed by Intel's directors as a good-bye gift.

Otellini joined Intel in 1974, after also being considered for jobs at Fairchild Semiconductor and Advanced Micro Devices, said Andy Bryant, Intel chairman, during a speech at the meeting.

"He chose Intel because of the people and environment he saw in the interview process," Bryant said.

Otellini was ahead of the curve in understanding technology and made breakthrough innovations in manufacturing and computing, Bryant said.

"Although silicon was an emerging technology, Paul saw it's potential," Bryant said.

Bryant pointed out that Otellini also delivered the first mobile chips to be used in smartphones and tablets, and spearheaded the effort to redesign PCs into ultrabooks, Bryant said.

Otellini also oversaw the company amassing $117 billion in cash reserves and increasing annual revenue to more than $50 billion, Bryant said.

"The board is grateful for his innumerable contributions," Bryant said.

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Agam Shah

IDG News Service
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