Intel Ireland manager looks into the future

"If the auto industry had moved at this pace, you'd be getting Rolls Royces with 100,000 miles to the gallon, and it would be cheaper to throw them away than to park them," Frank McCabe mused at the opening of his company's new Irish factory this week. A 30-year veteran of the computer industry, he remembers when a chip that today wouldn't run an ATM machine used to cost a $1 million.

He doesn't claim that these days he can see around corners, but the way he operates as general manager of Intel Ireland shows a capacity for anticipating future problems. An example: in the summer of 1995, when the gleaming, new Fab 14 plant was on the cards, but not necessarily for Ireland, he remembered that anyone with £100 could delay a planning application for four months.

"Without corporate approval, I went ahead and got all the planning permission," he confesses. "Because if you sit on your tail end and wait for it to happen, it goes to corporate level, then it's `Aw! Ooops! It's going to take six months,' when some other site is ready to go."

In such an industry, it is crucial for a company to maintain its programme of capital investment. Intel's recent profits warning, he points out, did not derail any projects.

"I've been in this industry since 1965, and it does have speed bumps every so often," he adds. "One will have periods of phenomenal growth like 30 per cent a year and one will have periods of less growth, and there will be adjustments from time to time. And those that are going to be successful in the industry need to be able to anticipate some of those changes when they occur and adjust to them, and not just go right over the cliff.

"So what we've tried to do is manage expenses at a time like this while still keeping our capital programmes going. One of our successes over the years has been to have the courage to continue to invest heavily in capital and R&D."

This strategy is obvious at Intel Ireland. The company has already invested £1.8 billion in its Leixlip operations, and is now moving to upgrade its Fab 10 factory to make microchips at the new, 0.25 micron standard.

"If you think about it, in one year, when we have that done, we will have totally converted the site from where it was to where it is now. We have moved away from motherboards to single edge connectors, converted Fab 10 to 0.25 microns, and we've built a brand new facility on quarter-micron. So we've totally re-invented ourselves."

Despite concerns that the pace of expansion at Intel and other large multinationals has led to a shortage of skilled workers, Mr McCabe says the universities are doing a credible job turning out enough engineers.

"Last year, the technician issue looked like a problem, and I spoke to the Minister for Education. He put the head of the Dundalk RTC in charge of a taskforce in which I participated for a while and it moved at tremendous speed, and broke through an awful lot of bureaucracy," he adds.

"That led to 300 extra technicians. So there's a joint industry-Government initiative that worked!"

Meanwhile, Intel Ireland is expanding its own base of skills and experience: "The neat thing that's happening here is that we're progressing people through the organisation very fast. One of the things we were in short supply of was 10-year experienced semi-conductor engineers, but now these young folks we've got in, who've gone and spent six months in the States; within about four years they're getting the same experience that typically was a 10-year veteran."

With computer speed doubling about once every 18 months, Intel knows it has 15 or 20 years before it has to find a material even better than silicon at transmitting electronic impulses. Mr McCabe is confident the company can do that, but he's worried that in the meantime, bandwidth could slow things down.

A home or business computer, taking content from somewhere else, can only go as fast as the connection it has to the rest of the world. Intel's dream of a billion connected PCs by 2001 will be a nightmare if the bandwidth problem is not resolved.

For Ireland and other countries, says Frank McCabe, this issue is essential: "The basic core infrastructure in most countries is pretty good. The problem is the last mile to the house, where you've got a very, very narrow pipe, and it costs you a lot for the information flowing through that pipe."

Without a high bandwidth pipeline into every home and office, small businesses cannot hope to reap the benefits of the information age. With one, he says, the world is their oyster.

"Ireland has to make sure it gets high bandwidth into the home at a very reasonable price. At the moment, I suspect we have in Ireland the highest cost for access to the Internet of any country in Europe."

The State should try to hold onto the other things that give it an advantage over other countries: "Agility, speed and flexibility are the biggest differentiators we have in Ireland over continental Europe. And the other major differentiator is that we have an outstanding education system."

The Irish State has had less time than most other countries to build up a heavy bureaucracy, he adds, and has a young, vibrant workforce looking for fresh ways of doing things.

He is somewhat concerned that further European integration could lead to what major companies would see as more restrictive labour laws. "I think the Irish Government is aware of this it's not any one piece of legislation, it's a combination of legislation that can do this. I think what we have to do in Ireland, before it becomes a directive, is look at every single piece of potential legislation and ask the basic question: `Will this increase agility, speed and flexibility and therefore more jobs?' And that is the core question we're all in this together."

The current economic boom is great, he adds, but we must make sure to make the most of it. This means staying focused on what it takes to be competitive in a global economy, working smarter and more productively, and deepening our technology base.

"I'm a great believer in setting quantitative metrics hard-figure targets and driving for them. We should look for those metrics that we're behind on in Europe and set a goal of being the best in Europe just mould it and go do it!"