NEW YORK Indicating one destination of Intel Corp.'s $4.2 billion investment in R&D this year, president and chief executive officer Craig Barrett revealed this week that the company is already working on 450-mm (18-inch) wafers.
"Our skunks works is currently developing 450-mm wafers, and we have already developed 0.03-micron transistors," Barrett told a gathering of analysts here. Only a few semiconductor companies are preparing 300-mm wafers for production at this time.
Underscoring its commitment to communications, a breakdown of Intel's R&D spending showed that 30 percent was going to communications research, including wireless clients, network processing and providing Ethernet to the home.
Asked about the company's decision to severely cut pricing on the 1.7-GHz Pentium 4 processor introduced this past week, Paul Otellini, vice president and general manager of the Intel architecture group, said, "Replacing the P III with the P4 is our first priority right now. We have a strategy to reestablish higher price points with the 2-GHz version of the chip."
The release of Windows XP by Microsoft later this year will mark the first time Microsoft and Intel have simultaneously announced new generations of software and hardware. Intel revealed that the companies would for the first time undertake a joint advertising and promotion campaign in late fall. "We've looked at XP," said Otellini. "It's got a great user interface and Web functionality. It's also very good at doing what the P4 is good for."
Striking a cautious tone on Thursday (April 26), Barrett said, "These are not fun times, but there's no reason to doubt that the technology will continue its historical 16-to-17 percent growth year over year, with the usual downturns along the way."
Positive economic signs were innumerated by Mike Splinter, Intel executive vice president and director of sales and marketing. "Inventories are finally back to historical levels . . . second-quarter distribution figures are the highest to date . . . there's a marked uptick in the Asian market . . . and our P4 processor is the fastest-ramping processor to date," Splinter said. These factors form the foundation of Intel's newfound optimism that the bottom of the latest semiconductor slump has been hit. Intel's revenue outlook for the second quarter is $6.2 billion to $6.8 billion, and the company said it expects to see an uptick in the second half of this year.
"The Internet will be the driving force going forward," Barrett said, "with the fastest growth coming from Latin America, Asia and Eastern Europe. As a result, we urge everyone to take a less U.S.-centric viewpoint."
Dispelling rumors that Intel may have slowed manufacturing, Barrett pointed to the $7.5 billion it will spent on manufacturing capacity in the coming year, and to its $4.2 billion R&D budget, up from $2.9 billion last year.
Barrett also said that the link between PC and handheld devices will only grow stronger, particularly within the home. Pointing to burgeoning demand for the Pentium 4 processor, especially in foreign markets such as China, Barrett said, "Anyone who says that people aren't upgrading their PC is either over 30 or a journalist."