As PC sales decline and the computer server market becomes more competitive, semiconductor giant Intel is struggling to find a new chief. Last November, chief executive officer Paul Otellini (News - Alert) surprisingly announced his resignation without any successor in place. Otellini has declined to elaborate on why he was leaving three years before reaching the company’s retirement age.

Hans Mosesmann, an analyst at Raymond James, told the New York Times that, “His decision left the company in limbo. It looks like there was no succession plan in place, and that is troubling.” He added, “They are probably a month away from Otellini leaving, and nothing is settled.”

Meanwhile, as per the NYT report, as the board looks at external candidates, the company is also seeking the new chief from within. NYT reporter Quentin Hardy wrote, “In contrast to Silicon Valley’s culture of job-hopping, at Intel (News - Alert) someone with 15 years’ experience can be called a newcomer. The company’s leaders believe that it is critical for the chief executive to be steeped in the company culture.

A source close to the situation told the NYT that the job of the board is to pick the candidate who can best grow into the job. Also, according to the source, “Intel has to define its next act.”

Concurrently, Intel chairman Andy Bryant, who has been with the company for 32 years and served as its chief financial officer, has been calling for a fundamental change. At company meeting, according to another source, Bryant has been preparing employees for a new era. He said, “The customers have changed, and we have to as well.”

 According to industry analysts, the two top contenders to be Intel’s next chief executive are Brian Krzanich and David Perlmutter. Both are insiders and close to the semiconductor giant’s core business. While Krzanich is Intel’s chief operating officer, overseeing its fabrication facilities, Perlmutter is the chief product officer responsible for chip design.

Other potential candidates are Renee James, head of Intel’s software group, and Stacy Smith, Intel’s chief financial officer. However, the report indicates that Smith lacks an engineering background, which weakens his prospects.