Intel restructures, senior exec leaves for EMC

A man walks past an Intel wall at the 2009 Computex trade show in Taipei June 3, 2009.

SAN FRANCISCO/BOSTON (Reuters) - Intel Corp, the world's top chipmaker, announced a reorganization of its major product divisions and said an executive who helped run a group that rang up more than half its sales last year had left the company.

The restructuring combines Intel's two major product divisions -- one that designs and markets chips for personal computers, servers and other computers, with one that designs and markets chips for mobile devices.

The chipmaker also said on Monday that Pat Gelsinger, a senior vice president who co-managed the group that supplied chips for PCs and servers, took a job with storage equipment maker EMC Corp after returning from a sabbatical.

Insight 64 analyst Nathan Brookwood said Gelsinger probably left after he learned that the restructuring would leave him out of the succession line for CEO.

Gelsinger was named a division president at Hopkinton, Massachusetts-based EMC, making him one of three candidates mostly likely to succeed CEO Joseph Tucci. EMC also said that Tucci would remain in his post through at least 2012.

Gelsinger could not be reached for comment.

Broadpoint AmTech analyst Doug Freedman said that Gelsinger may find the job at EMC more challenging because there is more competition in the storage equipment market than in the microprocessor industry, where Intel's only key rival is far smaller Advanced Micro Devices Inc

Intel held 80.6 percent of the microprocessor market in the second quarter versus 11.5 percent for AMD, according to market research firm iSuppli.

"Companies adopt Intel architecture whether they like it or not," Freedman said. "Prove to me you can run a company where people actually have choice."

At Intel, the division that Gelsinger co-managed accounted for 55 percent of the company's $38 billion revenue in 2008.

Executive Vice President Sean Maloney will run the combined product group's business and operations, while Executive Vice President Dadi Perlmutter will manage product development.

Company spokesman Chuck Mulloy said the reorganization had been planned for months and was not prompted by the departure of Gelsinger.

Mulloy said that Intel had offered Gelsinger "a role" following the restructuring, though he declined to elaborate.

Andy Bryant, the company's chief administrative officer, will lead Intel's manufacturing operations and Chief Executive Paul Otellini will devote more of his time to corporate strategy, the company also said.

Mulloy declined to discuss the board's plans for choosing a successor to Otellini.

Intel also said General Counsel Bruce Sewell was leaving.

Shares in Santa Clara, California-based Intel fell 0.77 percent, or 15 cents, to close at $19.36 on Nasdaq. EMC rose 0.12 percent, or 2 cents, to $16.92 on the New York Stock Exchange.

(Additional reporting by Ritsuko Ando; Editing by Dave Zimmerman, Steve Orlofsky and Richard Chang)