Barrett tells Intel employees to shape up

After a year of missteps, processor delays and design problems, Intel Chief Executive Officer (CEO) Craig Barrett has called on the chip manufacturing giant to change its methods and improve the way it brings products to market, according to an internal memo posted to the company's corporate intranet and dated July 21.

"There are many reasons for these (product delays and manufacturing issues)," wrote Barrett in an excerpt of the memo provided by Intel. "In the end, the reasons don't matter because the result is less-satisfied customers and a less-successful Intel."

"This is not the Intel we all know and that is not acceptable," he wrote.

The memo was dated five days after news reports surfaced about a delay in the release of the company's latest Centrino mobile chipset, code-named Sonoma, which was pushed back because of a design problem.

This has not been a good year for Intel. The company has experienced problems moving to a new 90 nanometer process technology, causing a delay in the release of its Dothan and Prescott microprocessors.

In June, the company recalled some of its 915 G/P and 925X chipsets because of a flaw in the I/O controller that prevented some computers from starting normally.

This came a month after the company scrapped plans to build two future processors -- the next generation Pentium 4, called Tejas, and a future Xeon successor called Jayhawk -- in favor of new designs.

"Craig Barrett is very acutely aware of some of the executions that we've been having recently," said Tom Beermann, an Intel spokesman. "What he was trying to do with this open letter to employees was to indicate that he is very personally focused on it, and that it is taking up a great deal of his own personal attention."

The memo was issued weeks after a senior management meeting in which Barrett brought up his concerns with Intel's recent track record, Beermann said.

"He spoke very openly and directly to them about how important these issues are to them and to let them know, in no uncertain terms, that our recent record was unacceptable," Beermann said.

Still, Barrett's memo hit some positive notes, citing a record revenue outlook for the company's next quarter and improved company profits. "By many measures, Intel is performing well," Barrett wrote.

However, the fact that Intel has improved its financial results "just makes our recent problems all the more disappointing because of what we could achieve if Intel were performing well," Barrett's memo states.

The call for improvements was probably not sparked by single problem, said Kevin Krewell, editor in chief of the Microprocessor Report. "You can call it the equivalent of boiling a frog. It just slowly creeps up on you, and all of a sudden your realize that there was a whole lot of stuff in the last year that was just wrong in terms of execution," he said.

"It does happen periodically. Every once in while Intel gets a little too comfortable in its role. It gets lax in certain areas," said Krewell, who noted that five years ago, the company had problems meeting demand for its Pentium III processors, a problem that was compounded by its ill-fated decision to support Rambus' RDRAM (Rambus Dynamic RAM) memory chips.

Barrett seems to share a similar view, according to the memo.

"Intel has been in tough spots and we have always gotten through them because everybody focused intensely on the challenge -- and we have always emerged a stronger company as a result," Intel's CEO wrote.

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Robert McMillan

IDG News Service

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