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Remarks from Steven R. Grant -- Vice President, Technology & Manufacturing Group, Intel Corporation December 6, 2004 -- Leadership Summit 2004 SLIDE
1 (Title) Good
Morning and thank you for inviting me to participate in what has become an
important annual gathering for Oregon’s business, political and civic
leaders.
It is a pleasure to be here with Senator Wyden and Allyn Ford to share
some thoughts on global competitiveness.
Senator Wyden has given me a real challenge today. He has asked me to explain Intel and Intel’s history in Oregon in 10 minutes. I am glad to see that Senator Wyden has set himself at Intel processor speeds so please hang on. SLIDE 2 (World Map) Intel was founded in 1968 and today has a worldwide workforce of over 80,000 people. Our annual revenue is over $30B with more than 450 products and services and almost 300 facilities worldwide. Today Intel leads the world in advanced silicon technology. And without question, the heart of that activity is right here in Oregon.
Our
emergence as a global company started early.
But it was not until 1995 that our revenue outside the America’s
exceeded 50%.
SLIDE
3 (Revenue by Region) Today,
emerging and mature markets outside the United States are the source of 3/4
of our revenue.
An
important take away from this is even though the lion’s share of our
revenue comes from outside the Untied States, the vast majority of both our
workforce and our manufacturing are in the United States. So
why did Intel come to Oregon? SLIDE
4 (1974 Technology) This
is 1974. Most
of us remember the IBM Selectric typewriter and slide rules.
In case you are feeling nostalgic, both of these items are for sale on
EBay…a retail opportunity unimagined 30 years ago.
This slide also shows the product we were making in 1974.
Our first microprocessor, the 8080 went into the Altair computer kit.
In
1974 Intel chose Oregon as its first remote campus in the US beyond the
Silicon Valley.
Many of the reasons Oregon was selected are still criteria for
investment today:
Oregon had a solid education system, a skilled workforce, shovel ready
industrial land, low cost electrical power, abundant water, and a quality of
life that appealed to our workforce.
When
you look at the list of reasons we came, it is clear that much has changed for
both Intel and Oregon.
Today, power for industrial users is among the most expensive in the
nation, land is scarce, if available at all, and our education system faces
serious challenges at every level.
Oregon’s workforce is still skilled and productive but the threat is
real and the warning signs are present. We
continue to grow in Oregon because Oregon has taken steps to make sure we can.
Starting with the unitary tax repeal in the ‘80’s and continuing
with the Strategic Investment Plan (SIP) in 1993 Oregon looked to the future
and created an investment climate that spurred Intel’s investments.
SLIDE
5 (Intel Oregon Headcount) As
you can see from this slide, the impact of Intel’s SIP agreements in 1994
and 1999 was growth in both investment and jobs.
These agreements with Washington County and the City of Hillsboro are
striking examples of the winning results that occur when we work together for
the good of Oregon.
Washington County, Hillsboro and Intel have worked hard to develop a
relationship of trust and collaboration.
We are good neighbors to each other.
SLIDE
6 (Intel Products) Intel’s
investments in Oregon today can be summed up as virtually everything we do.
This is the largest site for Intel worldwide with over 15,000
employees. It
is also the most diverse in terms of its operations.
A piece of everything you see on this slide, happens right here in
Oregon. In Oregon, we have established the center for Intel’s manufacturing and our research on both products and processes. Ronler Acres is the crown jewel of Intel. Every Pentium Processor ever made was developed in Oregon. Our flagship at Ronler Acres, D1D, is the most advanced semiconductor manufacturing facility in the world. It houses thousands of researchers in a space than can accommodate 6 football fields. At
Ronler, nanotechnology is not a new concept.
Our engineers have been working in these dimensions since the late
‘90’s.
Just
3 miles away, at Jones Farm, Intel’s top engineers and innovators develop SLIDE
7 (Intel’s capital investment in Oregon) As
the state’s largest private employer we contribute $9 billion of economic
impact to the state’s economy each year.
Our direct payroll is over $1.5 Billion and since 1974, we have
contributed over $8.6B in capital investment to Oregon’s economy. Beginning
in 2000, during the worst economic downturn since the 80’s, Intel invested
4.27 Billion in capital to build 2 factories and revitalize a third.
Given
our economic impact, we are frequently asked by Oregon’s leaders how Oregon
looks as a prospect for future investment.
The straight answer is that Oregon does a number of things well, but
there are areas of concern.
Much has changed since we arrived in 1974. Oregon’s
tax structure is competitive with other states for capital intensive industry
like ours. In addition, we are seeing greater emphasis in improving the
regulatory process at the state level.
The Governor’s willingness to meet with us and his interest in our
business is greatly appreciated.
The
greatest competition for investment today is not from other states, but from
other countries.
No US site, including Oregon, can claim a cost advantage over
international locations.
The cost difference between a factory in the United States and a
factory offshore is $1 billion over 10 years.
The majority of this disparity is the difference between our federal
tax burden and tax relief provided by countries that are eager to attract
investment and the skilled jobs to stimulate their entry into the global
marketplace.
We
need to support a federal competitiveness initiative that makes sure that we
keep our most valued industries here in the United States SLIDE
8 (Oregon College Hiring) This
brings me to the most important aspect of our competitiveness challenge --
education. At
every level, Oregon’s competitive edge in education can and must be
improved. Over
the last 4 years, Intel has hired 441 PhD’s in engineering and computer
science in Oregon.
Only 7 came from the Oregon university system.
We hired 347 master’s degree engineers and only 11% came from Oregon
schools. At
the bachelor degree level we did better, with 21% but that number too should
be higher. The
simple truth is that today the Oregon university system is not producing
enough highly skilled quality engineers to meet our hiring needs, especially
at the graduate levels.
Our
workforce needs are changing and we now hire more PhD engineers than those
with bachelor’s degrees. Intel is working with ETIC and other initiatives to
address the problem.
Intel currently provides scholarships to 72 students enrolled in
schools of engineering in Oregon.
Greater support and commitment is needed to ensure that Oregon schools
are producing a workforce that can compete to win in the global economy. I
could take all day to talk about the education challenge but let me give you
one quick thought on K-12.
We place a lot of emphasis on making sure every child reaches the
maximum potential and that is the right thing to do.
Yet despite this approach, even our best and brightest students are
lagging behind.
20% of students entering our engineering programs in the US need
remediation in math.
We have to do better than that.
Finally, I want to close by saying I came to Oregon over 20 years ago as an energetic young man straight out of college. Oregon is home for me and my family. It is also home for thousands of Intel employees and their families. We are not just a faceless employer. We are 15,000 citizens of Oregon ready to roll up our sleeves to work alongside you to make Oregon all it can be. View
Steve Grant's Slides (1.8MB) Back to Highlights from Leadership Summit 2004
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