Page last updated at 23:08 GMT, Monday, 25 May 2009 00:08 UK

Craig Barrett: Goodbye to Intel

Intel Corporation is the company that makes about 80% of the world's computer micro-processors. Craig Barrett, the outgoing chairman, has held every top job in the company during his 35 years there, including those of chief executive officer and president. Peter Day talked to him to reflect on three and a half decades of extraordinary change.

Craig Barrett
Craig Barrett spent 35 years at the world's top microchip manufacturer

Intel likes 'Moore's Law'.

Formulated by Gordon Moore, one of Intel's founders, it stipulates that computer power, or speed, or both, doubles every two years.

"Gordon postulated that law in 1965. He did not think it would last more than another 5 years, but now 45 years later, we're still following that road map."

When Craig Barrett joined Intel from Stanford University in 1974, personal computers were not even on the market yet. "The first IBM computer was introduced in 1981, so we've had roughly 28 years of that extraordinary capability brought to consumers, which has changed the way the whole world works today."

Still growing

Intel manufactures the micro-processors, made of silicon chips, that sit inside all personal computers. That much has been consistent, but "the beauty of our industry is that every 10 years it totally reinvents itself and we exceed our own expectations in the technology and the impact of technology on society."

And the things the company makes its money from can change within a year. "What could be more competitive than having 90% of your revenue in December come from products that weren't there in January?"

The advances we've seen in consumer electronics in the past decade will be far exceeded in the next decade
Craig Barrett

Revenue growth has slowed for the past 9 years or so and is now around 1% a year. This is very different from what it used to be.

"The company in the last 35 years has grown dramatically. When I joined, it was doing 50 million dollars of business a year. We now do 50 million dollars of business every 12 hours."

Dr Barrett thinks, however, that there are still growth opportunities, despite the slower revenue increase, like "the opportunities in consumer electronic devices, in small handheld devices, with broadband wireless, high-end graphics and imaging capability."

"There is no question in my mind that the advances we've seen in consumer electronics in the past decade will be far exceeded in the next decade. Moore's Law is not slowing down".

Manufacturing revolution

But how can they keep following Moore's Law?

"This question is not asked by young people who use the technology, who want ever more processing power for their animations, games, calculations. Or by the petroleum industry that wants ever more powerful processors for exploration, or the financial industry that wants more powerful processors for their financial calculations.

"But it's a fair question. We'll find ways to use the processing power in exciting, new applications.

Craig Barrett in a lab in 1970
In the early 1970s Dr Barrett was Professor of Engineering at Stanford

"Animated movies are now going from flat screen to three-dimensional. The reason that is happening is more cost-effective computing power allows them to do 3D imaging."

One particular contribution Dr Barrett brought to Intel was manufacturing methodology.

Some people credit him with having saved the company, by generating a revolution in the yield of the number of chips they got off a wafer of silicon. Was that what was failing badly when he became Chief Operating Officer?

"We had very strong competition from Japanese-based manufacturers who were really experts at manufacturing in the 1980s. We responded to that."

Dr Barrett travelled to Japan many times to learn from the Japanese. He applied what he learnt there, and took it even further with scientific principles.

Record fine

"And perhaps one of the greatest achievements or feelings I've ever had was after travelling to Japan in the mid-80s to see how they were doing business, we had a constant flux of Japanese businessmen come to Intel in the 90s to see how we were doing business.

"We were able to make a complete transformation to our manufacturing capability."

It has a lot to do with yield, with the number of useful chips that come off a wafer, as opposed to the number of defective ones. "The name of the game is always to decrease the defect density, increase the yield. That's usually the difference between profitability and a loss."

To achieve that, it mattered to copy exactly. All Intel manufacturing plants are now identical, no matter where they are based. That was not always the case, as they used to be independent of each other and thus individually different.

Dr Barrett learnt this lesson from McDonald's, where French fries are made and taste the same in every outlet, no matter what country it is in.

They are currently having to deal with a completely different issue. The European Commission fined Intel a record 1.06bn euros ($1.45bn; £948m) for anti-competitive practices. Dr Barrett says they are "surprised and disappointed".

"We strongly disagree with the contentions that the EU has put forward. We don't think the evidence supports the accusations and we will appeal in the strongest terms".

And what else will the future hold? "I'll keep my finger in the discussion on [American] education and competitiveness. Those are two important topics which need more attention."

You can hear Peter Day's interview with Craig Barrett in full on Global Business on the World Service from Tuesday 26 May. Click here to listen or to subscribe to the podcast.

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