News

Intel's Barrett: Prepare for the Upswing

• By John K. Waters
• March 12, 2001

SAN JOSE, CA—Despite an economic slowdown that is causing serious belt-tightening throughout the technology industry, Intel Corporation will invest some $12 billion in capital expansion and R&D during the coming year. So says Intel CEO Craig Barrett, speaking to attendees at last week's semi-annual Intel Developer Forum.

"You never save your way out of a recession," Barrett said. "The slowdowns are going to end, and you need to prepare for the upswing. The build-out of the Internet, the build-out of this digital world is still in its infancy."

During his keynote presentation, Barrett demonstrated Intel's successor to the long-delayed Itanium chip, code named "McKinley." According to Barrett, Intel plans to begin pilot production of the new chip before year's end. The chip will have a much larger integrated cache for better performance than the Itanium, Barrett said, and it will have three times the data throughput power. Intel claims that the McKinley chip will provide eight times the performance of an equivalent UltraSparc chip from Sun Microsystems on some benchmarks.

Barrett and Paul Otellini, general manager of the Intel Architecture Group, outlined other company initiatives for the coming year and on into 2002, including:

• Itanium server chips: The company plans to announce the server version of the long-delayed chip in the second quarter of 2001.
• Copper technology: Intel is investing in equipment to manufacture copper-based chips via the 0.13-micron process.
• The "extended PC": Intel will promote its vision of home entertainment networks with Pentium 4 desktop machines running Microsoft's new OS, Windows XP, at the center. Both Intel and Microsoft are expected to push this idea aggressively in the coming months. Microsoft is touting XP as the perfect OS for delivering video, audio, photographs and other media.
• Mobile Pentium IIIs: The company announced a 700MHz Pentium III at the conference; look for a 1GHz mobile Pentium IIIs later this quarter.
• Mobile Pentium 4s: Intel expects to be producing P4 chips for portables sometime in 2002. A brand-new mobile chip architecture designed for power-efficiency and wireless connectivity is expected in 2003.

"I think the investment will pay for itself in lower costs," Barrett said of Intel's plans. "It is new technology and products that let you walk out of a recession."

Although Barrett's keynote could fairly be described as upbeat, he was anything but sanguine about current economic conditions. "There is absolutely a slowdown in U.S. manufacturing," he said. "It hasn't spread to other markets yet, but if the malaise does move overseas, a wider recession could hit."