DECEMBER 12, 2008, 12:00 A.M. ET Ex-Chief Says Intel Should Power Cars
By REBECCA SMITH and DON CLARK Wall Street Journal http://online.wsj.com/article/SB122904767715400759.html Former Intel Corp. chairman Andrew Grove is pushing the world's biggest maker of microprocessors to consider a new venture -- becoming a manufacturer of advanced batteries for plug-in electric cars. Mr. Grove, who retired in 2005 but still advises Intel, is urging the current chief executive, Paul Otellini, to steer the company into battery production as a way to diversify business as well as fill a strategic niche as auto makers shift to production of plug-in electric vehicles. If the auto industry moves ahead with that strategy, it could require hundreds of thousands of batteries, but little manufacturing capacity exists in the U.S. Some experts caution that Chinese and Japanese companies, such as BYD Motors, Panasonic Corp. and Sanyo Electric Co. Ltd., are positioning themselves to dominate the emerging industry. It's unclear whether Intel executives intend to follow Mr. Grove's advice. Mr. Otellini declined to comment, but a spokesman said that Intel already has investments in battery-related companies through its Intel Capital unit. "We consider battery technology important and we look at a lot of things. But whether we will do anything more, we can't say at this time," the spokesman said. Mr. Grove, 72, still commands a bully pulpit as one of the nation's leading technologists. He has been a force for change at the company before, leading its painful exit in the late 1980s from most popular memory chips. But Intel has struggled to create another major business. Mr. Otellini has lately tried a diversification drive aimed primarily at chips for pocket-size Internet devices, a new class of low-end laptops and consumer electronics devices and industrial equipment. Moving into automotive batteries would be a much more radical shift. Among other things, Intel would have to hire battery experts or collaborate with those at other companies, and put money into new factories. Like other companies affected by the downturn, Intel may be more inclined to conserve cash. Intel last month projected sales would decline 12% in the fourth quarter from the third period. Mr. Grove says Intel's "strategic objective is tackling big problems and turning them into big businesses" and he believes that the company's deep pockets -- Intel reported more than $12 billion in cash and investments as of Sept. 30 -- gives it the ability to figure out ways to improve batteries and drive down costs. He also has become something of an evangelist for dual-fuel vehicles, a view shared by many, including President-elect Barack Obama. Many experts contend that battery production problems could limit growth of the electric car industry. "Batteries are absolutely the No. 1 constraint for electric cars," says Mark Duvall, a researcher at the Electric Power Research Institute in Palo Alto, Calif., a utility-funded research organization. "It's also the single-most expensive component right now." A number of small U.S. firms have entered the lithium-ion battery market with hopes of supplying auto-makers. General Motors Corp. is working with A123 Systems on a battery that could appear in cars as soon as 2010, although GM is also working with a Korean firm. Both Boston Power Co. which is supplying batteries for Hewlett-Packard Co. laptops, and Valence Technology Corp. which makes lithium-ion batteries for the Segway scooter, plan automotive batteries. -- ================================ George Antunes, Political Science Dept University of Houston; Houston, TX 77204 Voice: 713-743-3923 Fax: 713-743-3927 Mail: antunes at uh dot edu *********************************** * POST TO [email protected] * *********************************** Medianews mailing list [email protected] http://lists.etskywarn.net/mailman/listinfo/medianews
