Intel's Paul Otellini Sounds Off

In an interview with BusinessWeek, the chipmaker's CEO offers his thoughts on the EU antitrust suit, chip demand, Apple, Congress, and more

Intel (INTC) Chief Executive Paul Otellini has had a bumpy two and a half years at the helm of the chip giant. He has fought a pitched battle against rival Advanced Micro Devices (AMD), which last year picked up its first orders at Dell (DELL)—previously an Intel stronghold. He also faces an antitrust battle in Europe, where in the worst case, the penalty could top $3 billion.

A former marketing executive, Otellini is the first nonengineer to head the chip giant. (He has a bachelor's degree in economics, and an MBA from Berkeley.) Despite widening margins and 15% revenue growth in the third quarter, Intel's stock price is hovering at the same level as in May, 2005, when Otellini took the reins at Santa Clara (Calif.) headquarters from the current company chairman, Craig Barrett.

Otellini is pushing ahead. He's positioning Intel to be a leader in WiMax, the broadband standard that could bring fast and cheap wireless computing to both mobile devices and PCs. He's also focusing on the environment. He vows that Intel's new $2.5 billion chip fabrication center in China will be the greenest semiconductor plant in the world. And he's pushing Intel researchers to develop chips that can deliver more computing power with less electricity.

Otellini stopped by BusinessWeek's New York offices on Oct. 22 to discuss Intel, the tech industry, and phenomena from Facebook to Apple (AAPL). Here are excerpts from the conversation.

On social networks:

"The socialization of the Web is going to have a dramatic impact on business. Now I can see it morphing…Think of the Facebooking of your IT shop. I think this is a wonderful phenomenon. We haven't done this yet, but why can't you put up a Craigslist for open jobs? I'm sure word would get out if we did."

On Europe's antitrust case against Intel:

(The European Union charged Intel in July with violating antitrust rules by selling chips below cost to strategic customers. Intel has until January to issue a formal response.) "Their basic argument is that we sold under cost." That argument, Otellini says, "is flawed. I think if that's the central part of their argument, we'll fare fine."

He adds that he finds statements by EU Competition Commissioner Neelie Kroes about Europe's role in regulating "dominant" companies "very troubling. If they take that position with us, or Qualcomm (QCOM), or Microsoft (MSFT), which are all American, I might note, you wonder where they're going long-term.…They could redefine what 'success' means." Otellini says that if the Europeans do not broaden their case against Intel, "the worst case is to write a check." (Fines could be as high as $3.2 billion.)

On the global appetite for Intel chips:

"From a business standpoint, Europe was superstrong this quarter. There's been a big drive toward notebooks. It's the latest fashion statement, particularly in Germany and the U.K.…Globally, we don't see any dark clouds on the horizon. You've got 2 to 3 billion people coming into the market. And a lot of countries have an IT-first agenda.

"It's not just China and India. It's Vietnam, Thailand, South American countries. They all are focusing on IT—unlike the U.S."