Intel sees upturn in processor market in 2010

Paul Otellini was in a buoyant mood at the Web 2.0 Summit

Intel chief executive Paul Otellini has said that he expects to see the chip market rebound next year.

Otellini said at the Web 2.0 Summit 2009 in San Francisco that the market had hit bottom sooner than he had expected, and is growing thanks to strong demand in China and from consumer buyers worldwide.

"We found bottom. Actually, I think we found bottom much earlier than everyone thought we would," he said.

The 2010 boost will come from corporate hardware refreshes, he said, pointing out that the average company desktop is now five years old and the average laptop four years old.

The cost of powering and maintaining this ageing fleet is now outweighing the purchase price of new equipment, and chief financial officers are getting that message, according to Otellini. Budgets are still tight but should free up next year.

As for chip design, Otellini said that silicon is running out of time as a platform, and that Intel will produce three more generations of silicon processors at best before moving on to new materials.

The chip giant has already produced chips in new materials, but Otellini declined to give more details. "It's cool. Trust me," he said.

Otellini added that there are still concerns ahead. He was particularly critical of tax deferments being considered by the US government and how they might affect the forthcoming recovery.

He also spoke of the need to reform the patent system. Patents should be used to protect an individual's invention, he said, not as a tool to extort money from companies.