The world’s largest chipmaker Intel Corporation (NASDAQ:INTC) announced Monday that its chief executive officer Paul Otellini, 62, has decided to retire in May, 2013. Otellini has served the Santa Clara, California-based company for four decades, of them, eight years as CEO. His retirement decision has surprised everyone, as the company tradition allows chief executives to retire at 65.

Intel ceo Otellini

Otellini, who took over as the company’s fifth CEO in 2005, managed the company through tough economic times and market transitions. As Intel Corporation (NASDAQ:INTC) CEO, Otellini has been through many ups and downs. On one side, he helped the company grow its revenues from $38.8 billion to $54 billion, and extended Intel’s lead in manufacturing technology. After assuming his position, Otellini persuaded Apple’s Steve Jobs to shift the Mac from PowerPC processors to Intel’s. The transition helped Apple Inc. (NASDAQ:AAPL) gain a strong foothold in the PC market.

On the other hand, Intel Corporation (NASDAQ:INTC) failed to develop presence outside of computer chips. Only recently the company has considered smartphone market. And its failure in the mobile market is the primary reason of the company’s stagnant stock prices.

“I’ve been privileged to lead one of the world’s greatest companies,” Otellini said. “After almost four decades with the company and eight years as CEO, it’s time to move on and transfer Intel’s helm to a new generation of leadership.” Otellini said he wished to remain an adviser to Intel even after the retirement.

Now he would work with the company’s senior management and chairman Andy Bryant on leadership transition. Intel will consider external as well as internal candidates for its top spot. On Monday, the company also announced the promotion of three senior managers to the position of executive vice president. They may be the internal front-runners for the position of chief executive. The three executives are: Brian Krzanich, COO and head of global manufacturing; Renee James, head of the company’s software business; and Stacy Smith, Intel’s CFO and director of corporate strategy.

“Paul Otellini has been a very strong leader, only the fifth CEO in the company’s great 45-year history, and one who has managed the company through challenging times and market transitions,” said Intel Corporation (NASDAQ:INTC) chairman Andy Bryant.

Intel Corporation (NASDAQ:INTC) shares are down 17 percent this year to date.