To: Gottfried who wrote (9706 ) 4/15/2001 7:34:41 PM From: Donald Wennerstrom Read Replies (2) | Respond to Gottfried,latimes.com Intel is increasing expenditures for plants, equipment, research and development this year, despite a poor year for earnings. The big semiconductor company is following a dictum of its co-founder, Gordon Moore, that "you must spend your way out of an economic downturn because you don't get healthy on old products." Experts in Silicon Valley do not deny the economic slowdown. On the contrary, most see a troubled 12 to 15 months ahead for companies in electronics, computers and Internet-related businesses. "Technology marches ahead. It has no clue whether we're in a bull or bear market," says Andy Kessler, head of Velocity Capital Management, a Palo Alto investment firm. "The deck gets reshuffled in every downturn. Successful companies are preparing now to gain position in the next upturn," observes Floyd Kvamme, a partner in Kleiner Perkins Caufield & Byers, a venture firm in Palo Alto. Intel is doing just such preparation. Coming off a year in which the electronics leader suffered delays and disappointments in product development, with earnings falling and the stock price down 63% from its all-time high, Intel is stepping up investment because it needs to change. Other lessons include the fact that technology takes a long time to become fully commercial. Regis McKenna, whose marketing innovations brought Silicon Valley firms to national attention, points out that it took decades from the invention of the transistor in 1947 at Bell Labs to Intel's microprocessor powering personal computers. And it took 25 years from the Defense Department's development of the Internet in 1969 to the founding of Netscape Communications with its Web browser in 1994. The Internet still is far from commercially developed.
