Broadcom Names Outsider as CEO

Chip maker Broadcom Corp. named a new chief executive Tuesday, nearly two years after flamboyant founder Henry T. Nicholas III stepped down as CEO to focus on his family.

Scott McGregor, who was most recently the head of the $6.4-billion chip business at Royal Philips Electronics, will take over at Irvine-based Broadcom on Jan. 3.

The communications chip company has been run since January 2003 by Chief Executive Alan E. “Lanny” Ross, who took the job on an interim basis. He will remain on the board.

Ross said McGregor was one of the first people the company considered for the post, but until recently he was not willing to leave Philips.

McGregor, 48, was traveling in Europe on Tuesday and not available for interviews, Broadcom spokesman Bill Blanning said.

Analyst Tai Nguyen of Susquehanna Financial Group in San Francisco said McGregor was an apt choice for Broadcom. “I think they have to expand more into the digital consumer space, which is one of Philips’ strengths,” Nguyen said.

But first McGregor will be faced with excess inventory that has held back Broadcom’s earnings growth. Its business of making chips for server computers also has been softening in the wake of stepped-up competition from Intel Corp.

“They have to find new ways to grow,” Nguyen said.

McGregor earned a master’s degree in computer science and computer engineering from Stanford University. He has served as president and CEO of Philips’ chip business, which accounts for 17% of the company’s sales, since September 2001.

He previously held a series of software-related jobs, including a two-year stint at Microsoft Corp. as architect and development team leader of the original version of the Windows operating system. Time Magazine’s international edition this year singled him out as an influential technology leader.

Broadcom co-founder Henry Samueli, who is chairman and chief technical officer, said McGregor’s reputation for making technology products easy to use would help Broadcom as it sought to expand in markets such as hand-held devices and mobile phones. He also said McGregor would fit in with the collaborative culture at Broadcom.

“He strikes me very much as a team player,” Samueli said.

Ross, 69, presided over a turnaround at Broadcom. Last week, the company turned in its fourth consecutive profitable quarter after three years of losses.

Shares of Broadcom declined 7 cents Tuesday to $26.01 on Nasdaq.