"
Intel history and a storied career in the chip industry to a close, Craig Barrett (above) retired as chairman of Intel today at the company's annual meeting in Santa Clara, Calif.
The 69-year-old spent 35 years at the company and rose in the manufacturing ranks under the leadership of Intel leaders Robert Noyce, Gordon Moore, and Andy Grove. Barrett succeeded Grove as chief executive of the world's biggest chip maker in 1998 and he gave up the CEO job to Paul Otellini (below) in 2005. Barrett's last meeting passed today without incident or much emotion -- except for the usual shareholder questions about why the stock price remains below its bubble-era peak.
For the past four years, Barrett served as chairman. He kept a punishing travel schedule, meeting with heads of state about technology policy. He sought to improve education, alleviate poverty, and encourage technology adoption in the U.S. and around the world.
While Barrett was a rational foil to the sharp-tongued cantankerous Grove, he had an acerbic wit and became increasingly cantankerous himself about the failure of government leaders to deal with investment in research and development and education -- both of which he feels are necessary ingredients to national competitiveness.
Barrett's era was also marked by a time of (relative) industry peace. In 1996, he helped negotiate a settlement to an eight-year legal war with Advanced Micro Devices and he managed to avoid an antitrust trial in a clash with the Federal Trade Commission in 1999. But the company's legal troubles resumed and have intensified under Otellini as the company clashes again with governments, Advanced Micro Devices and Nvidia.
The latest development on that front was the European Union's record $1.45 billion fine for antitrust violations. Bruce Sewell, general counsel, said at the meeting that the company is hopeful it can overturn the fine in its appeal. But he said it was an "uphill battle."
At the shareholder meeting, Barrett said Intel is extremely well situated in each of its microprocessor markets and is positioned to win more business. Otellini, meanwhile, said the business remains competitive. He also said the prices necessary to win 100 percent of the business aren't worth the loss in profits. The company invests three times as much on R&D as AMD, and it has six times the market share, Otellini said.
Shareholders noted that the stock peaked in 2000 and is now down 80 percent from that level. Otellini acknowledged that Intel's revenues and stock price have been flat for the past decade, but he said better earnings would lead to improvement in the stock price. He said he was excited about the growth of new markets such as chips for netbooks (web browsing handhelds that are smaller than laptops).
"The only way to get the stock price up is the old fashioned way, through earnings," he said.
Otellini predicted that demand for microprocessors would continue on the historical rate of growth of microprocessor unit sales of 10 percent a year -- but not in 2009. He also said there are a billion units a year selling in adjacent markets such as cell phone microprocessors, and that represents an opportunity for Intel's expansion plans.
At the close of the meeting, Otellini thanked Barrett for his years of service since 1974. Barrett went out with a characteristic wisecrack. He noted that Intel became the largest chip maker in the world in 1992 and has held that position for the past 17 years. Then he said that Otellini's job was to hold that position "or else."
Barrett's last meeting had other light moments.
"I want to discuss the human right coffee," said one shareholder. "We didn't get any."
Maybe when the downturn is over. For now, Intel is reducing its caffeine footprint, Barrett said.