US being left behind as locale for tech investment, says Intel

The United States may be left behind when technology companies decide where to make their next big capital investments, Intel chief executive Craig Barrett says.

With just a week left as chief executive of the world's largest chip-maker, the outspoken proponent of free trade and low corporate taxes said Intel could save as much as US$1 billion ($1.36 billion) in taxes over 10 years by building its next factory outside the US.

Such a decision, which would be worth US$5 billion or more to the host nation, could come in the next year, unless the company decided to upgrade one of its US sites.

"That weighs heavily on our minds, our directors' minds, on our shareholders' minds," Barrett said.

Although Intel has been criticised for seeking corporate welfare, Barrett said the company was pushing for the US to give incentives that lowered tax rates for companies that invested in the country.

"My opinion is it's unlikely the Government will overcome its present position," he said.

"There are many locales that you can go to that have much lower corporate tax rates, even tax holidays for a period of time, and capital incentives or training incentives at a national level."

Barrett, 65, who is set to become Intel's chairman next week at the company's annual meeting, has long highlighted what he views as the shortcomings of US policies.

Although based in California, Intel derives most of its revenue from overseas.

Barrett minced few words about his distaste for the federal bureaucracy.

"I challenge you to find anything coming out of Washington that smells like a digital initiative to increase US competitiveness," he said, contrasting that with e-government initiatives in Britain, France and Germany, and smaller places such as the United Arab Emirates.

Turning away educated people who wanted to emigrate to the US "has to be the dumbest thing in the world".

"We allow everybody in but the value-add people who have educational capabilities and the ability to contribute to the economy." 

Barrett said Intel was increasingly looking at India, which he said was becoming an attractive place to set up an assembly and testing facility, the lower-tier of Intel's manufacturing operations.

Europe was also contributing to the leapfrogging of the US.

"If you were to look at Old Europe - UK, Germany, France, Italy - each one of those Governments has officially announced major programmes to increase their computer infrastructure."

- REUTERS