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Intel's Otellini Talks To Me About Big Expansion

Tuesday, 10 Feb 2009 | 5:06 PM ET
CNBC.com

I just got finished speaking with Paul Otellini, Intel's CEO , about his company's massive expansion plans, announced earlier today, and he tells me while his news wasn't enough to turn red ink into black on Wall Street, it did bring a smile to the face of at least one person.

He received a call last night from President Obama, who after reading Otellini's prepared remarks to the Economic Forum in Washington, DC delivered this morning detailing Intel's plans, told Otellini that it was the first real piece of good economic news he had received since taking the oath of office.

Wall Street analysts had expected Intel to spend over $5 billion in capex this year. The company will increase that by 40 percent, spending most of it domestically, with the prime beneficiaries being the top names in chip equipment, including Applied Materials (reporting earnings tonight and suffering badly from the Recession) and KLA-Tencor .

Otellini tells me that analysts shouldn't read in today's news as a referendum about Intel's performance during the current quarter, as worries about the possibility of Intel swinging to its first loss in 87 quarters; he says this investment is about the future.

Otellini One-on-One
CNBC's Jim Goldman sits down with Intel CEO Paul Otellini to discuss the company's decision to invest $7 billion in manufacturing in the U.S.

You can watch the full interview with Otellini here.

Questions? Comments? TechCheck@cnbc.com

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