Intel Says Asian Countries Should Continue Technology Investments
An INTERACTIVE JOURNAL News Roundup, 5/11/98
interactive.wsj.com
Intel Corp. repeated its stance Monday that the best way for Asian
countries battered by financial turmoil to recover is through long-term
investment in information technology.
"If countries don't invest in information technology, they'll get isolated very
quickly" and economic development will inevitably slow down, John
Davies, general manager of Asia Pacific operations, said at the company's
1998 Asia Pacific Technology Forum in Taipei.
"Countries can't afford not to" invest in
information technology, Mr. Davies added.
The only way Asian governments can pull
themselves out of the crisis is by investing
long-term in technological development that will play a key role in
increasing business and trade, he said.
"The need...to invest in information technology is a necessity, not a luxury,"
he said.
The U.S. spends about 4% of its gross domestic product on information
technology, while Asian countries spend only about 1% to 2%.
Intel will continue to hold seminars to educate executives from top Asian
companies about the need for technological development, Mr. Davies said.
Last week, Intel said it plans to invest $50 million over the next five years
in an information-technology and development center in China, part of the
$2.8 billion the company expects to spend on global research this year.
Intel also just opened its first manufacturing plant in China, an investment of
$198 million.
Intel has offices in 14 Asian countries, with its regional headquarters based
in Hong Kong.
Taiwan has become the center for producing the "building blocks" of the
PC, Mr. Davies said. Taiwan produces about 60% of the graphic cards
used in PCs world-wide, and Intel announced Monday that it plans to
increase its purchase of Taiwanese electronics products by 50% to $240
million this year.
Chairman Andrew Grove declined to comment on whether Intel is seeking
new business partnerships with Taiwanese companies, especially in
contract manufacturing.
The world's largest chip maker said its sales are increasing to China, India
and Taiwan, which has helped make up for falling sales in Southeast Asian
countries hit by the ongoing financial crisis.
But Mr. Grove urged Taiwanese technology companies to show caution in
expanding into the production and design of microprocessors.
"It's a very complex and expensive business," he said. "It's not something
you can do as a sideline."
Mr. Grove seemed unperturbed by the prospect of Taiwanese companies
competing with Intel. "If there's more people in it, we'll just work harder,"
he said.
Separately Monday, Intel said it opened its first 0.25-micron
microprocessor plant outside Dublin at a cost of $1.3 billion, including
equipment.
Intel said the factory, called Fab 14, will make advanced chips including
the Pentium II, Pentium II Xeon and Intel Celeron.
Intel also plans to convert its Fab 10 plant, adjacent to Fab 14, to the
0.25-micron process technology in a move that should be complete by
next year and cost several hundred million dollars. Fab 10 makes chip sets
on a 0.6-micron process technology.
Intel wants to convert its entire microprocessor operations to 0.25-micron
technology by the beginning of the fourth quarter.
The physically smaller 0.25-micron chip can operate at speeds up to 400
megahertz, Intel said, while consuming less electricity and generating less
heat.
Intel has three other factories, located in California, New Mexico and
Arizona, that build chips on 0.25-micron process technology.
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