(INTC) - Get Report

chairman Craig Barrett says he will leave the company in May.

Barrett, 69, has been with Intel for 35 years and served as chairman since 2004 when he replaced Andy Grove. Barrett had been CEO of Intel from 1998 to 2005, when he was replaced by current chief Paul Otellini.

Barrett led Intel through the tech boom and the subsequent post-bust period. He was one of the more vocal proponents of the practice of granting employees and executives stock options. He

publicly fought

accounting reform efforts to expense the cost of employee options. He argued that other countries like China, which didn't expense options, would have an edge in rewarding employees for innovation.

He will be replaced by Jane Shaw, a retired drug industry executive who is on Intel's board, and will become the chip giant's non-executive chairman.

The move comes as Intel, the top processor supplier to the PC industry, faces

heaping inventories

as consumers switch preferences to cheaper, stripped-down netbook computers.

Intel shares rose 2% Friday.