Intel CEO Paul Otellini Offers His Outlook For The Company's Future
Tuesday, October 14, 2008SUSIE GHARIB: Intel (INTC) reported better-than- expected quarterly results late today. And then, in after-hours trading, the stock rose 5.5 percent on encouraging comments about the outlook for its fourth quarter. That's another triumph for the chip giant as it celebrates its 40th anniversary this year. New York bureau chief Scott Gurvey recently spoke with Intel CEO Paul Otellini and began by asking him to describe Intel's mission.
PAUL OTELLINI, PRES. & CEO, INTEL: At one level, I capriciously describe our mission to people as we dig a really big hole in the ground, we take three years and $5 billion to put a factory -- a semiconductor factory into that hole. That factory is going to come up with any technologies that haven't been invented yet, that will produce microprocessors that have not been designed for markets that don't yet exist. And we get to do this every year.
SCOTT GURVEY, NIGHTLY BUSINESS REPORT NEW YORK BUREAU CHIEF: Can you tell us in general terms what are the trends and the products we are going to see in the years ahead?
OTELLINI: Well, it varies. You get into rural Australia or rural India and it's just the thirst of knowledge, the thirst of connectivity, the thirst for inclusion into the digital world is really high. But yet the threshold to that is pretty high as well. There is no electricity. There is no bandwidth. There is -- you know, so how do you bring that kind of capability to people so that you bring them into the modern world? If it's a business person, what we're trying to do is make sure that you make your life easier. The technology works for you. And it's not a pain to have to deal with it.
GURVEY: You've recently introduced a new processor, the Atom, for the mobile environment.
OTELLINI: Atom is a radical departure for us, you're right. It is the first time we have ever used our most advances technology to build the smallest thing possible, optimized at cost. My view is that if we want to see a world of the PC and computers going from 300 million or 400 million units a year, where it is today, to a billion units a year, we have to get the cost down and we have to get computers to be, you know, hundreds of dollars -- a few hundreds of dollars, not a thousand dollars. And products like this allow us to do it with good margins.
GURVEY: Intel has been a leaders in what is called the green computing effort. Can you tell us why and what you're doing?
OTELLINI: We went to a power-optimized product line across the board starting 2006. We've done that for notebooks from 2003 on. But we changed all of our products in '06, servers, desktop, workstations. You know, notebook products. And everything is not focused on performance per watt. The net impact of that new line starting in '06 to today, versus the prior product line, in terms of the -- these products are faster, but they consume less power, is $2 billion of electricity, or enough electricity to power a million homes for two years. So that's a pretty big savings.
GURVEY: How do you recruit talent for a company like Intel?
OTELLINI: It's a highly technical, highly educated workforce worldwide. We do operate globally, so we recruit the best and the brightest around the world. We have the opportunity to offer them jobs, you know, here in the United States or in their home countries if they want to go back to their home countries, even if they're been educated here. So it's a critical part of our business. Even in these days, these economic times, we will probably still hire 3,000 or 4,000 college graduates a year.
GURVEY: And you're not exactly recession-proof, but the demand for these products is such that you can hold up better than most, I would assume.
OTELLINI: Oh, part of that is that, you know, much of our market is now in emerging markets, 75 percent of our sales are not in the U.S. And the emerging markets up to this point have been maybe not recession-proof, but their GDP numbers are still quite good. Even if China has a bad year this next year, it's probably 7 percent instead of 10 percent GDP growth. So it's still a pretty good growth opportunity for us. Also traditionally in prior recessions, information technology is at its essence a productivity tool. And so businesses have invested in IT to be able to improve their businesses. If you're on Wall Street today, you know, faster computers allow you to have that arbitrage moment faster than your competitor. So we are still seeing even in the midst of this crisis, a significant investment pattern coming out of those -- the remaining banks.
GURVEY: Mr. Otellini, thank you.
OTELLINI: Appreciate it.
