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Intel's Grove to step aside
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March 26, 1998: 6:04 p.m. ET
Craig Barrett, president and COO, to succeed Andrew Grove as CEO
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NEW YORK (CNNfn) - Andrew Grove, the man who helped spearhead the digital information revolution, announced Thursday he was resigning as chief executive officer of Intel Corp. but would retain his post as chairman.
In a widely expected move, Intel said President and Chief Operating Officer Craig Barrett would succeed Grove as chief executive officer.
Barrett, a 24-year veteran at Intel, is credited with a major role in ramping up and improving output at the Santa Clara, Calif.-based leader in computer chip-making.
Intel's board is expected to formalize the appointment at its next organizational meeting May 20, the company said.
Grove, 61, an Intel founder and its top executive for the last 11 years, has been battling prostate cancer. However, in an interview with CNN's Lou Dobbs, Grove said his health was not an issue in his decision to step aside.
"I am ready and Craig is ready," Grove said. "I have been CEO for 11 years. Intel has been around 30 years. I'm the third CEO, so I've had more than my average share of tenure. Craig has been developing his capabilities and his scope and reach ever since the beginning of this decade."
Ever since he was named as Intel's chief operating officer in 1992, Barrett has been the presumptive heir to Grove, analysts said.
"This transition has been in the works for several years," said Jim Barlage, an analyst at Salomon Smith Barney. "In fact, Grove stayed on longer than initially expected."
"The real management transition will begin when Grove leaves," Barlage said, adding that there is no such time in sight.
Barrett, a native of San Francisco, received Bachelor of Science, Master of Science and Ph.D. degrees in Materials Science from Stanford University in Palo Alto, Calif.
Scaling the ranks at Intel since joining the company in 1974, Barrett was named to the board in 1992 and was tapped to become its president last year.
Grove, who was recently named Time's "Man of the Year" for 1997, is universally credited as the reason for Intel's dominance in the computer industry.
"Andy made the decision that Intel would not give away the intellectual rights to other suppliers," said Mona Eraiba, a technology analyst at Gruntal & Co.
"They would not share with Advanced Micro Devices like they did in the early '80s, and they would not give it to the Japanese like they did before with NEC or others. So by that single decision he laid the foundation for dominance."
Despite the announcement of Grove's departure, analysts had a positive outlook for Intel stocks in the long term, even if the next few months provide a few bumps along the way.
"We think the stock is still a very good long-term investment," said Chris Chaney, an analyst at A.G. Edwards. "But we think the next six months are going to be pretty rocky for the entire industry, including Intel, and they've got a lot of challenges to surpass over the next six month.
Separately, Intel's Board of Directors on Thursday approved an increase in the repurchase program of 100 million additional shares, which at today's levels would be worth $8 billion.
As of March 25, Intel had the potential obligation to repurchase 14.8 million shares under outstanding put warrants. Since initiating the program, Intel has repurchased 235.4 million shares.
Intel also said it is delaying construction of a $1.3 billion manufacturing plant in Fort Worth, Texas. The company said it wants to be able to upgrade the plant before it opens. It also cited lower-than-expected sales as a cause for the construction halt.
Intel shares (INTC) were up 1-15/16 at 78 3/16. 
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