Intel 'well-positioned' in Asia to brave slowdown

Demand for first Nehalem chip doubled expectations, and customers are reacting quickly in response to slowing economy, reports Asia-Pacific executive.
Written by Vivian Yeo, Contributor

Intel and its customers are "well-positioned" to ride out a global economic slowdown, according to a regional executive of the chipmaker.

Customers in Asia have reacted "very quickly" to a slowing economy, Navin Shenoy, Intel vice president of sales and marketing, and general manager of the Asia-Pacific region, said in a phone interview Tuesday. Shenoy was speaking to ZDNet Asia from Seoul, where he attended the country launch of Core i7, the first Nehalem processor to go to market.

"They (customers) are cutting inventories [and] getting their balance sheets in order," he pointed out. "This time, unlike previous downturns, the inventories are going to be pretty lean, so when the market bounces back, we'll be well-positioned…our customers will be well-positioned."

Last week, Intel announced it was scaling back on its fourth-quarter revenue outlook and gross margins, and indicated cost-cutting measures it was putting in place.

Reiterating Intel CEO Paul Otellini's stance of focusing on innovation in spite of a recession, Shenoy noted that the company's philosophy is "you can't save your way out of a recession, you have to innovate your way out". To that end, Core i7 can help "to generate excitement again in the industry" and be that innovative element that customers are looking for, he added.

"That's the only way we're going to work our way out of a recession--with new products," said Shenoy, adding that he remained "very bullish and optimistic" about the medium- to long-term growth of the PC industry. "What you can expect to see from us is a relentless pursuit of bringing out new products and continuing to work country by country to keep the growth going in the industry."

Along with the global launch of the Core i7 Tuesday, there will be at least 500 unique system offerings based on "the fastest chip Intel's ever done", said Shenoy, adding that the chipmaker has already shipped 100,000 units of the processor worldwide.

Based on pre-launch orders, customer demand in the region for Core i7--designed for high-end desktops--was "double our expectations", he noted. "From an Asian perspective, I'm very optimistic about the potential for the product."

Intel is also confident of its competitive position in the market, having rolled out its 45-nanometer process based on its high-k metal gate formula last year, said Shenoy. On the other hand, AMD launched its first 45-nm processors just last week.

Intel will next release Nehalem chips for the server market, in the first half of 2009. Processors for mainstream desktops and notebooks will be available in the second quarter, said Shenoy.

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