Intel to spend $20bn on R&D in 2002

27 February 2002 Intel CEO Craig Barrett has announced plans to spend $20 billion (€23bn) on research and development (R&D) and capital expenditure in 2002. Barrett was speaking at the Intel Developers’ Forum in San Francisco, California.

Barrett insisted that the only way out of the current recession for technology companies is to research and develop exciting new applications and products – something Intel says it is doing.

Meanwhile, Intel vice-president Mike Fister indicated that the group is on track to release its follow-up to the poorly received Itanium 64-bit microprocessor, called “McKinley”, in the summer of 2002.

Fister said: “I’m going to prove that [it] kicks butt. You ain’t seen nothing yet.” The new chip, designed jointly with systems giant Hewlett-Packard (HP) has cost around $1 billion (€1.15bn) to develop, but sales have been unimpressive. Only about 2,500 Itanium-based servers have so far been shipped. Most of those are being used for porting and testing of applications with the new chip architecture and IA-64 instruction set.

At the same time, Barrett illustrated the capabilities of Intel’s landmark three gigahertz (GHz) Pentium 4 chip by showing a film running on the advanced chip – the movie featured 63-year-old Barrett himself snowboarding in California.

He conceded that the downturn affecting the semiconductor sector is the deepest ever, but also pointed out that it is the ninth to have hit the industry in 28 years. Barrett said that no one could predict when the recession would end, short of indulging in idle speculation.

However, analysts agree with Barrett’s assertion that there is strong potential for growth outside the most advanced economies, particularly in mainland China, Brazil, and India. Barrett is also confident that Moore’s Law – which broadly dictates that computer power doubles every 19 months – will continue to hold for another 15 years.

Ultimately, Intel considers that it is in a strong position to make the most of the expansion of the Internet and of the convergence of mobile phones with handheld computers and PCs. The US giant wants its products to constitute the building blocks of this unifying technology.

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Ben Rossi

Ben was Vitesse Media's editorial director, leading content creation and editorial strategy across all Vitesse products, including its market-leading B2B and consumer magazines, websites, research and...

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