Former Intel CEO Craig Barrett on saving Intel

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I have ONE question for Craig Barret, if you are so smart when you were CEO why did you allow Intel to go down the path that lead the company to where they are today?

"Craig Barrett served as CEO of Intel from 1998 to 2005 and as Chairman from 2005 to 2009. He was not only the captain steering the entire Intel ship, but also the steward of its long term prosperity. "

"From my analysis, Intel spent $50.32 billion on share buybacks between 2000 and 2009, when Mr. Barrett was either CEO or Chairman. I can’t help but wonder: what if he had spent only half that amount, keeping $25 billion to improve Intel’s long term competitiveness, or even to start Intel Foundry at a time when TSMC was still not as strong as Intel?"

Former Intel CEO Craig Barrett on saving Intel

A couple of teasers from the article: "6. The current Intel CEO's comments about not investing in new technology (14A) until customers sign up is a joke." "9. The FFWBMs (four former wise board members) of Intel continue to claim you have to break Intel into two pieces before any customer...

semiwiki.com

When Robert Noyce, Gordon Moore, and Andy Grove retired from Intel one by one, Craig Barrett became the person responsible for guiding the company into the 21st century and beyond. Unfortunately, he made several mistakes and questionable decisions that have had long lasting negative effects.

One example was his choice of Paul Otellini as successor, the first Intel CEO without an engineering background. Otellini is best known for rejecting Apple’s request for Intel to manufacture SoCs for the upcoming iPhone, believing the order would be too small and unprofitable. The first iPhone launched in June 2007, when Otellini was CEO and Barrett was Chairman of Intel.

Fast forward to 2024: Apple paid about $23 billion to TSMC for manufacturing services, while Intel’s total revenue for the same year was $53.1 billion. It's a stark and sobering contrast.

 

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"Craig Barrett served as CEO of Intel from 1998 to 2005 and as Chairman from 2005 to 2009. He was not only the captain steering the entire Intel ship, but also the steward of its long term prosperity. "
"From my analysis, Intel spent $50.32 billion on share buybacks between 2000 and 2009, when Mr. Barrett was either CEO or Chairman. I can’t help but wonder: what if he had spent only half that amount, keeping $25 billion to improve Intel’s long term competitiveness, or even to start Intel Foundry at a time when TSMC was still not as strong as Intel?"

As you could read from the Fortune op-ed, Craig was always a staunch believer in being an IDM.

When Robert Noyce, Gordon Moore, and Andy Grove retired from Intel one by one, Craig Barrett became the person responsible for guiding the company into the 21st century and beyond. Unfortunately, he made several mistakes and questionable decisions that have had long lasting negative effects.

One example was his choice of Paul Otellini as successor, the first Intel CEO without an engineering background. Otellini is best known for rejecting Apple’s request for Intel to manufacture SoCs for the upcoming iPhone, believing the order would be too small and unprofitable. The first iPhone launched in June 2007, when Otellini was CEO and Barrett was Chairman of Intel.

I don't think I can stand to read this BS story another time. PSO did not want to build more N-process fabs, even just one, to build low-margin parts, from the perspective of Intel's balance sheet. It made no financial sense to him, or a lot of other people at the time. Intel was not a low-cost fab, and everything about Intel's fab process was about performance and high clock frequencies, two things you don't want to optimize for in an iPhone or an iPad. So Apple would have needed process variations, and I'm sure that would have translated into R&D resources that would have to be redeployed from high-margin CPUs. Remember, Jobs wanted a very low price. BTW, PSO didn't like Itanium either. While he wasn't an engineer, I thought he was a pretty smart and rational guy, and I got to know him well enough to come to a conclusion like that.

Fast forward to 2024: Apple paid about $23 billion to TSMC for manufacturing services, while Intel’s total revenue for the same year was $53.1 billion. It's a stark and sobering contrast.

Former Intel CEO Craig Barrett on saving Intel

A couple of teasers from the article: "6. The current Intel CEO's comments about not investing in new technology (14A) until customers sign up is a joke." "9. The FFWBMs (four former wise board members) of Intel continue to claim you have to break Intel into two pieces before any customer...

semiwiki.com

Yeah, isn't 20-20 hindsight great?

 

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Li-Pu Tan is the first Intel CEO in recent years to have the courage to identify Intel’s deep-rooted problems and take painful but necessary steps to correct them.

From Greg Barrett’s comments on how to “save” Intel, we can see some classic traits of Intel’s culture or Intel’s style:

1. “We are so unique, we are the chosen one!”

While TSMC, GlobalFoundries, AMD, Nvidia, Broadcom, Marvell, Qualcomm, and MediaTek fight fiercely for customers and survival, Intel has often been busy debating among itself about which high-end restaurant it should go to. Many Intel leaders, and likely many employees, seem to believe they have the luxury of choosing their customers, features, prices, and costs. Worse, they see this as the Intel way to win. In their view, it’s Intel who chooses the customers and sets the price and schedule.


2. Entitlement

Intel’s finances are in serious trouble. From 2022 to Q2 2025, the company has suffered billions in negative free cash flow, burning cash faster than it can generate. The solution? Pat Gelsinger’s approach is to ask domestic and foreign governments for “free” money. Craig Barrett’s idea went even further, asking Intel’s customers and competitors to chip in $40 billion to cover Intel’s own financial and management mistakes.

This conveniently ignores the fact that Intel spent a whopping $133.86 billion (2000~ 2021) or $83.54 billion (2010 ~ 2021) on share buybacks. Instead of investing that precious cash to position itself for the future, as many peers did, Intel used it to boost its stock price. The justification? See point #1 above.


3. “Give us some more time, Intel shall rise again!”

This mindset undermines the urgency for real, fundamental change. Intel seems to believe its customers and competitors can simply wait another two, three, or even four years while it pursues the “latest and greatest” technology. They don’t say it outright, but the underlying belief is obvious: the industry should give Intel more time to reclaim its glory. And the justification? Again, see point #1.

But Intel’s customers and competitors won’t wait. It's because they can’t afford to wait, and they don’t need to. Other solutions are readily available.