Intel will invest to beat recession, chairman says

Intel Corp., the world's biggest semiconductor maker, will focus on investing in new products to shield itself from the recession, Chairman Craig Barrett said.

"We will invest our way out of this recession," Barrett said in an interview in Cairo, where Intel announced a plan to make motherboards with Egyptian partners. "We will not save our way out of it."

Last month, the Semiconductor Industry Association forecast global semiconductor sales will drop 5.6 percent next year, the first decline since 2001. The group also cut its prediction for industry growth this year to 2.2 percent from a June forecast of 4.3 percent.

"At Intel, we worry about what we can control," Barrett said. "What we can control is not the world economy, but we can control our level of investment in research and development and new products."

The local partners of Santa Clara, California-based Intel's will be the Egyptian state-run Information Technology Industry Development Agency and the privately held Boraq, the Egyptian cabinet said in the statement released after a meeting between Prime Minister Ahmed Nazif and Barrett.

Intel fell 45 cents, or 3.3 percent, to $13.35 at 9:37 a.m. New York time in Nasdaq Stock Market trading. Before today, the stock had dropped 48 percent this year.

Flying Blind

"I think everybody is flying a little blind today. We'll take it month to month," Barrett said. "Frankly nobody saw this mess coming. Those people forecasting how long it's going to last have the same amount of credibility as those who didn't see it coming."

The plant, in 6 October City, southwest of Cairo, will start operation in September 2009. Exports are forecast to be about $20 million a year, with 85 percent going to African markets. The deal is part of Intel's World Ahead Program to reach a billion users in emerging and developing markets.

Motherboards are the circuit boards that hold the main components of a PC.