Intel CEO Paul Otellini Explains His Company's $7B Spending Plan
Tuesday, February 10, 2009PAUL KANGAS: The recession is not keeping Intel from the cutting edge. The chip maker said today it'll invest $7 billion in the next two years upgrading technology at its U.S. manufacturing plants. That will create some new construction jobs and support 7,000 high-wage workers. Stephanie Dhue caught up with the CEO of Intel, Paul Otellini on Capitol Hill. She asked him why Intel is making these investments now.
PAUL OTELLINI, PRESIDENT & CEO, INTEL: Every two years we make a decision to go to the next process generation or not in terms of silicon technology. It's time for that. It's also time to tell our shareholders and investors in terms of how large this investment is going to be and I thought it was important for us to come to Washington to do this, to be able to talk about a company investing its own money on the future, in this time.
STEPHANIE DHUE, NIGHTLY BUSINESS REPORT CORRESPONDENT: Is this a new commitment or is this a re-commitment of spending this money?
OTELLINI: It's a new commitment. It will be spent over 18 to 24 months in Arizona, New Mexico and Oregon, places where we have existing manufacturing facilities. We'll be significantly upgrading those facilities, retraining the employees, retooling the factories to build a new generation of technology.
DHUE: You said you thought it was important to come to Washington to make this announcement. Is it also important, will it help pass the stimulus bill which has some things in it that the IT industry wants?
OTELLINI: Sure, that helps, but that's not the reason we did it here. It's only incidental that all that is happening while we're here. I think it's important though while people are debating about stimulus that you look at stimulus in its entirety. What is it that corrects an economic cycle? It's people changing their savings rates. That's happened here in this country. It's government stimulus that's happening and now you're starting to see private enterprise make investments. The combination of those we hope will start turning around confidence.
DHUE: You also called on competitors to make investments. Do you think they will do so?
OTELLINI: I call on everybody in the industry, not just competitors. I would hope so. Part of it is that much of the tech investment cycle begins with the silicon. If we are making this investment, we're making a statement to our customers and to the eco system that Intel is making a big bet here. That means that if you're building memory chips or building graphics chips, if you're building LCD panels or if you're designing computers to take advantage of these ultra-high performance, low-power devices, you know that you can count on us to deliver them. So that's a statement of where the industry is going.
DHUE: Some say Intel can do this. They have an 80 percent market share. Does this put a nail in the coffin of your competition (INAUDIBLE)
OTELLINI: Having the best technology has always been really critical in our industry. The leading edge technology gives you the lowest cost and the best product performance, all the characteristics that people buy computers based upon. So we think by moving early we continue to have significant lead on the industry. Others will need to make their investment decisions on their own.
DHUE: We've been speaking with Paul Otellini of Intel, thank you so much.
OTELLINI: You're welcome.
