Intel to ride out US economic storm

Intel to ride out US economic storm

Faced with an uncertain economic climate, Intel president and CEO Craig Barrett sought to deliver a strong message last week that the chip giant can ride out the current economic downturn on the strength of its broad product offerings and by continuing to invest heavily in new technologies.

"Even though we're at a slowdown today, as you look forward to the build-out of the Internet, the building of this digital world is really in its infancy," Barrett said, speaking at the start of the Intel Developer Forum. "New products and industry innovation will drive us out of the recession."

The Internet is in its infancy and Intel aims to profit by providing "silicon building blocks" for each aspect of its growth, Barrett said. For consumers that means faster chips for handheld computers, Web-enabled mobile phones and PCs, which he confidently predicted will remain at the centre of the consumer lifestyle. For big business and service providers, Intel will offer ever more powerful processors for running large servers and networking equipment, he said.

Despite the "roller coaster ride" presented by the current US economy, Intel will continue to invest heavily, spending $7.5 billion on capital equipment and $4.3 billion on research and development in the coming year, he said. As an example of its commitment to keep releasing new products, Barrett said Intel will release 35 new silicon products this year in the area of networking alone.

"This is what I think every one of us has to do," Barrett told his industry counterparts gathered here. "Never save your way out of a recession."

The Intel chief hosted a series of demonstrations intended to show off the breadth of Intel's product arsenal. Over the next four days, Intel executives here are expected to shed more light on each area.

Most notably, Intel showed three servers running prototypes of McKinley, a 64-bit processor designed to help it compete in the lucrative, high-end server market where chips from Sun Microsystems, IBM and others dominate today. Simply put, 64-bit chips will process data in larger chunks than Intel's current, 32-bit offerings, allowing for better performance.

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