McCabe bows out at helm of Intel

 

The decision by Mr Frank McCabe to retire from Intel as vice-president and general manager for Ireland marks the end of a 40-year career in the semiconductor industry. His wide experience made him a mainstay of the company's success in Ireland.

At 62, Monaghan-born Mr McCabe is a peer of Intel's founder, Mr Andy Grove, and president and chief executive, Dr Craig Barrett. As vice-president of technology and manufacturing at the company, he dealt with both men and was the driving force behind Intel's decision to establish its huge Fab 14 microchip plant at its Leixlip base. Mr McCabe's successor is expected to be announced within the next four to six weeks. However, sources close to the company have indicated the appointment will come from within the Irish management team. Whether or not the candidate will automatically be given a role as vice-president is uncertain, but such a move would go some way towards reassuring Irish employees about the status of the Irish operation within the group. Mr McCabe remains confident the European manufacturing and technology centre in Leixlip will remain at the heart of Intel's activities.

He told The Irish Times this week: "Intel in Ireland will continue to be very successful. Our agility, flexibility and speed brought the Irish operation to where it is, and this will continue to be our goal along with deepening the technology base. I know the Irish team will continue to compete vigorously with the best in the world."

By the time Mr McCabe had joined Intel in 1994, he had already been at the helm of two General Electric semiconductor companies in Dundalk and Shannon. Then, following a stint in the US which culminated with a post as executive vice-president of engineering at Digital, he was persuaded to return to Ireland for the Intel start-up.

"I came here with the aim of growing the motherboard business, and every single goal was met or exceeded. Thirty per cent of all Pentium chips worldwide came out of here; that's a credit to the facility. We tapped into the best educational system in the world and recruited outstanding graduates at all levels."

Though it soon became clear motherboards no longer offered a viable way forward, Intel Ireland switched its focus to the production of single edge packaging for its Pentium processors. Meanwhile, Mr McCabe pushed for the establishment of another fabrication plant (Fab) here, which was officially opened in May of this year. That brought to $2.5 billion (£1.7 billion) Intel's investment in the Republic. This represents more than half the total investment in the electronics industry here since 1990.

It has been suggested that this constitutes an unhealthy dependence by the economy on one single organisation. Mr McCabe says: "One of Intel's key values is risk taking, and the IDA took some prudent risks here by going after the premier global companies.

"But this can't be done in a half-hearted way, so it had to face the reality that investors were not going to put suboptimum facilities in place. In any case, despite the attendant risks of having large-scale operations, Dublin is still growing at a very fast rate, and seems able to cope."

Mr McCabe is leaving the company at a time of uncertainty in the semiconductor industry. Intel's logic chip processing business has recently been affected by competition - a fairly new development - in particular at the lower end of the market from companies like AMD. Its smaller, memory chip business has also been through a very traumatic time. He says: "It is a boom or bust industry, where improvements tend to happen by a factor of four each time. Overestimates tend to be made about the potential market for new technology. Ireland wouldn't be the lowest cost area in the world either, so it is very important it competes with its superior education system and infrastructure."

He is particularly proud of Intel's capacity to introduce, or ramp, its products faster than anyone else. "We've a unique way of transferring technology that I don't think has permeated other industries yet." Intel is renowned for locking its employees into a very competitive culture, where workers' performances are rated by their "team mates", and bonuses in the form of company stocks are distributed with the goal of retaining staff. Mr McCabe believes this unique style of management has translated well to Ireland.

"The point is getting all the employees behind improving the performance of the company. We take an egalitarian approach, and anyone who revels in meritocracy and persistent change will like it here."

The greatest pleasure he has derived from Intel Ireland has been the success of the team he managed. "The people here have performed extraordinarily well, and it's great to see the deepening of technology taking place, in particular with the excellent work being done by the team at the NMRC [National Microelectronics Research Centre] in Cork. I would also point to the pleasure of dealing with Kieran McGowan [outgoing chief executive of the IDA], a wonderful civil servant who has done a superb job."

Having completed Intel's acquisition of the Alpha chip arm of Digital in the US, and then the roll out of Fab 14 in Leixlip, Mr McCabe believes now is the best time to step down and to start mentoring his successor. Apart from a move of house from Leixlip to Foxrock, he says he has no concrete plans for the future. "I will do something, but one thing's for sure, it won't be a role that requires 60 to 70 hours' work a week."