Intel Scoffs at 'Post-PC' Computing, but Prepares

Intel Chairman Andy Grove repeated his latest corporate mantra that "the internet runs on silicon" and said Intel must "follow the bits" wherever they take the $US30 billion semiconductor giant. "We are in the midst of a fairly sizable strategic transformation," he said.

The trend toward internet computing and increasing use of non-PC devices is driving Intel to figure out ways to slip its silicon into everything from cell phone chip sets and internet appliances to networking and communications products, flash memory, wireless and mobile devices, handheld computers and its traditional range of PC and server platforms.

This year, for example, Intel will invest more than $US100 million and dedicate 1,000 employees in a range of electronic-business products and services aimed at dotcoms and other ecommerce businesses.

The company has so far opened two new data centers to offer application hosting and other ecommerce services and will have 10 running by year's end, Barrett said. The company will also spend $US6 billion this year on a wafer fabrication and assembly testing facility to try to resolve processor supply problems that have plagued it for the past year.

"They've given themselves more running room" with a broader electronic-business strategy, said David Wu, directory of equity research at San Francisco-based ABN Amro. "Their old business is still growing, but the big boost for the future will come from the internet. Of course, their success or failure will be a much more speedy and observable event."

Investing in internet economy companies is also a growing part of the Intel agenda. In the past several months, the company has spent $US7.5 billion on acquisitions and invested $US750 million in more than 125 start-up companies.

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