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Tech Industry

Mr. Chips takes a final bow

Before leaving his post as CEO, Intel's Craig Barrett wants to make a few things perfectly clear.

When he appeared at Intel's annual developer forum earlier this week, Craig Barrett took the stage for the last time as the company's chief executive.

But while the craggy-faced Barrett may be approaching official retirement, there's nothing retiring about his demeanor. At 65, Barrett's still full of spice and vinegar and has no intention of taking it easy. During a chat with reporters following his keynote speech, Barrett briefly took stock of his legacy and offered a look ahead at the technologies he believes will keep Intel ahead of its rivals.

What are you most proud about at Intel?
If you look at our market-segment share, you'd be hard-pressed to say that we've lost a lot of ground in the last five years, so I'm proud of that. I'm proud of the ability to have the Intel brand be recognized...as one of the top brands in the world. I'm proud of our international expansion, and I'm proud that we came through the dot-com implosion. I'm proud that we maintain our profitability. I'm proud that we didn't subject our staff to massive layoffs like essentially every one of our competitors. I'm proud that we continue to invest in technology and manufacturing capability. I think you saw the results come out in the second half of '04 and going into '05. That suggested that was the right thing to do.

Could you talk about the next step for you, starting with the shareholder meeting in May?

The fact is that the industry is not slowing down.
I get to move into the chairman's role and make much the same transition as we made in 1998, when Andy (Grove) moved up to be chairman. My role will be to focus on a few things for the company. Education will be one; probably some interface with the government on issues like R&D, funding and infrastructure in the U.S.

I still intend to do international travel and business development for Intel, like we've been doing for the last 10 years, but Paul Otellini will be in charge of the day-to-day aspects of the company. I'll go to all the strategy sessions, as much as Andy has gone to all the strategy sessions in the last five or six years.

So I am very involved with the company, but it is time to pass the day-to-day operational aspect on to the next generation.

Do you plan to appoint someone to take Paul's role?
Paul has structured the organization to have all of his direct reports go directly into him and probably will operate without a COO, as we've had Paul in that job for the last several years.

For an extended period of time?
Well, historically, we've used that COO-type position as part of the orderly transition of management. So I think Paul will be using the next couple of years probably to decide who to move into that role.

What is your advice for Paul, as he takes over your role?
My advice to Paul is the same advice that I give to the rest of the company: Intel is a technology company. Intel is successful, and it continues to invest for the future and continues to function on all eight cylinders. I'll suggest that he pay attention to those...things: Continue to move technology forward and...continue to make sure that we operate in an excellent fashion inside on a day-to-day basis.

How significant is the move to dual-core technology?
A dual core is a little bit more of an evolutionary change. We've gone from single-core to hybrid, threaded to dual-core, and then multicore, so it's kind of a more gradual transition. But I think it's an important transition, because it really allows you to continue to take Moore's Law and crank out more functionality and more performance. You just can't continue to crank clock speed with the number of transistors...So dual core and multicore is probably a seminal change, just from that one aspect, to be able to continue Moore's Law going forward.

How do you think the industry is going to evolve? Do you think there's a real opportunity for someone to develop a new type of transistor?
I think the biggest challenge to the existing companies is the same challenge the vacuum tube guys had 50 years ago. Not one of the vacuum tube manufacturers made the transition to transistors.

The biggest challenge to the existing companies is the same challenge the vacuum tube guys had 50 years ago. Not one of the vacuum tube manufacturers made the transition to transistors.

GE probably came as close as anybody, but they dropped out of the semiconductor business what, 15 years ago? So the real challenge is: If something new comes along...how quickly can you adapt to that? We try to guard against being blindsided by (way of) all the research programs we have with universities, where a lot of that basic research is taking place. We're kind of trying to keep our fingers in every possible new technology that could replace the CMOS (complementary metal oxide semiconductor) transistor, and I don't think there is any indication as to a clear winner...today.

You guys are facing an antitrust investigation in Japan. There have been some reports that Japan is preparing to rule against Intel in some way. Are you prepared to change any of your business practices there?
We don't think we've done anything wrong in Japan, so other than that, I can't comment on what the Japanese FTC may do or may not do.

You haven't heard anything from them?
If I did, I wouldn't make it public before they made it public anyway. But you know, you get a lot of interesting dynamics, where the FTCs in different countries have different charters, and much like U.S. government agencies on occasion, they flex their muscles. I don't know whether it's one of those issues, or they have some definitive complaints, what have you. All we know they did is raid our office and interview some of our employees.

Could you talk a little bit about AMD?
They have been a competitor for 10 years. I think compared to 10 years ago, we have higher market-segment share in the processor business. I think from a competitive standpoint they've been good for Intel because they obviously--as any competitor would--keep you on your toes. They keep providing an environmental situation where you want to move technology forward. That's what competition is all about.

So we've competed with AMD for my entire existence at Intel, and I would expect we'll be competing with them 10 years from today.

How should a consumer relate to the importance of dual core?
Fair question. I would only tell the average consumer...it's the way that the industry is going to continue to follow Moore's Law going forward--to increase the processing power in an exponential fashion over time...Dual core is really important because that's how it's happening. Multicore is tomorrow.... Those are the magic ingredients that the average consumer will never see, but they will experience (them) through the performance of the machine.