Intel not abusing its chip market position - Barrett

Intel is not abusing its strong position in the computer chip market and does not have a case to answer in any new European Commission investigation of its sales practices, according to the company's chief executive.

In an exclusive interview in today's Irish Times, Mr Craig Barrett says the firm has gone to great pains to ensure that it does not abuse its market position.

His comments follow a decision by the European Commission last week to re-open a three-year-old investigation into claims of market abuse by Intel, which has up to 85 per cent of the computer chip market.

The claims were sent to the European Commission by AMD, Intel's main rival in the industry.

"We recognised over a decade ago that our market position required us to behave differently than other companies. We have taken this into account with all our sales, management and employee training," says Mr Barrett. "We go to great pains to ensure that Intel does not abuse its market position by engaging in unfair sales practices."

Mr Barrett, speaking at the opening of Intel's new $2 billion (€1.7 billion) fabrication plant in Leixlip, Co Kildare, this week, also rules out expensing stock options at Intel until the proper accounting standards body and the US Congress set new rules.

Stock options are a key way of retaining staff in the technology industry by offering employees the option to buy shares at a set price at some specified point in the future. This means that, if a company's share price rises in the interim, employees can make a profit on the sale of the shares.

Intel's decision not to expense stock options on its financial accounts will prove controversial, given that a majority of Intel shareholders, some 54 per cent, recently voted in favour of expensing stock options at the firm's annual general meeting.

The pressure is mounting on Intel to begin expensing options following a proposal from the Financial Accounting Standards Board (FASB) to force firms to begin expensing options in 2005.

Microsoft and IBM have also recently withdrawn their opposition to expensing stock options.

Mr Barrett said no one he knew was rationally suggesting that Intel should start expensing options until a proper standard had been decided on by the US accounting board. He said Intel would wait until a final ruling had been decided on by the standards body and Congress.

He said a cashless transfer of ownership was not an expense to the company and stock options were instrumental in helping to create successful firms.

Meanwhile, Intel launched a new chip last night code-named Grantsdale, intended to offer better graphics, audio and video for computers.