Intel Israel president: I see complacency in Israel

Mooly Eden tells "Globes" that he sees a disastrous complacency and dangerous ridiculing of high tech in India and China.

The launch of iPhones and tablets has further eroded the hegemony of the PC. "Globes" asked Intel Israel president and Intel Corporation (Nasdaq: INTC) EVP Mooly Eden whether the world has entered the post-PC era.

"That is a very successful marketing ploy," says Eden, adding, "But I dont think that these times will be remembered as the post-PC era. The PC will undergo a great many changes in the near future. In a few years, we'll look at the PC and we'll see that it is different. It won't be the same thing, but it will be around the same base. We'll look at the PC differently, we'll communicate with it differently, and it will be in a great many places. It will live on, but differently from how we know it."

It is easy for Eden to talk in marketing terms. During the past 30 years at Intel, he has become a prominent marketer of PCs, most recently as manager of Intel's PC Client Group, which is responsible for 70% of the company's revenue. He is thoroughly familiar with Apple Inc.'s (Nasdaq: AAPL) marketing machine, and although he tenaciously sticks by the PC, which seems to out of touch with unreality, it is hard to argue with the reality that Eden sees.

According to Eden, the change will come from enthusiasm for the PC because of its new features, such as facial and voice recognition, changes in shape and size, and an emphasis on applications that are far more power hungry than those available today. "In the coming years, there will be many changes in the shape of PCs, in terms of design and communications with the user," he says.

What will future Intel processors look like? An example can be seen at an IDF conference last week, where Intel presented a beverages machine based on a state-of-the-art processor, and which functions like a PC.

Eden says that the absolute change will occur when cheap and worthwhile ways are found to insert projections into eyeglasses, voice and gesture operation, which will require processing capabilities that Intel knows how to provide better than anyone else. "I still believe that when you want a good car, you need an engine. Without a good engine, the car won't go. What we need to do is to prove that there is software that needs this horsepower. Performance is needed, but applications need performance. An application that is too slow creates a terrible user experience," he says.

It's dangerous to ridicule India and China

Eden took up his new post as Intel Israel president in March 2012. This is one of the most important jobs in Israeli high tech and in the Israeli economy in general. As the man responsible for coordinating Intel Israel's operations, he oversees 8,000 development and production employees and $2.2 billion in exports (as of 2011), billions of dollars in annual operating costs, and has a huge influence on morale of Israel's high tech industry.

Is there a problem with Israeli high tech?

Eden: "After nine years in the US, I want to see a bit more before I answer that. What bothers me? I see complacency in Israel, which is a natural disaster. It's dangerous to ridicule India and China. Another thing that bothers me is whereas 15 years ago when we talked about an Israeli start up, it was clearly an Israeli invention. Today the world is flat, and Israel may have an edge, but there is also an option to choose. There are a lot of possibilities in Israel, but we must not be complacent, because that's a lethal danger.

"Another thing that I am learning - and the more I learn, the more I'm appalled -is the insufficient appreciation is the one-time shot in the arm we received from the Russian immigration. The average age of a physics teacher is now very high. If we dont have a new generation of teachers, we'll be in trouble. After all, I hire engineers from the Technion. We have this, but the question is whether we're now sowing the seeds for a harvest in 15-20 years? I sense that our complacency means that we're not doing enough."

Over the years, Intel Israel has become one of the world's most established and impressive enterprises and Israel's leading plant. However, its newest fab, to produce 14-nanometer technology processors, will be built in Ireland, which beat Israel for the investment. It is not possible to get a clear response from Intel Israel about how this decision affects the company's Israeli operations.

"Let's look at the cup as half full," says Eden. "We've just upgraded the Kiryat Gat fab to 22-nanometer, making it Intel's most advanced fab which produces state-of-the-art processors. Not every country sees upgrades of fabs to the latest technology, so the world isn't coming to an end. But without question, Intel has many fabs around the world. When Intel thinks about investing outside the US, it looks at the big picture, including the capabilities of the fab, the manpower, and the incentives.

"If we didnt get the 14-nanometer fab, OK, a decision was made, but if we dont get the next fab, 10 nanometers, either by upgrade or a new fab - and it is important to understand that companies are now very cautious about investment because the market looks different - that will be a pity. We're working with the government to see what can be done for Israel to be attractive for the next technology."

It will only be a pity?

"It will be a big pity. Let's put it this way: Israel's microelectronics industry is important, Intel Israel's exports are important, the number of employees at Intel Israel is very important. We started with this industry, and we want to continue it, and we're working with the government to ensure that we'll be more competitive ahead of the next selection (in 2013 - S.S.)."

According to reports, the government insisted on Intel setting up operations in Beit She'an as a condition of the development grant. How did Intel take this?

"I dont know exactly, but it's legitimate as part of the negotiations. If you're talking about a fab, in my opinion the only location will be the fab in Kiryat Gat. It's illogical to do something somewhere else, because of the investment required. But it's possible to do other things in other places, and it's legitimate to ask this. It shouldnt be forgotten that we're asking this as part of a comprehensive package that should be attractive enough."

CEO of Intel is irrelevant

Over the next two years, Intel, which has a market cap of $116 billion, will undergo a series of changes culminating in the appointment of a new CEO to succeed Paul Otellini. One candidate is former Israeli David Perlmutter, who serves as EVP and general manager of the Mobility Group. Eden has climbed the corporate ladder in Perlmutter's tracks, begging the question, what next? Is there a chance that he will one day vie for the post of Intel CEO?

"I dont think that I will ever be on track for CEO," says Eden. "I dont think that it's relevant for me, and I am proud of what I've done at the PC Client Group. My trip to the US was supposed to be for seven months, and I ended up staying for nine years. I always knew that I'd ultimately return to Israel and retire."

Published by Globes [online], Israel business news - - on September 19, 2012

Copyright of Globes Publisher Itonut (1983) Ltd. 2012

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