Intel needs to build car batteries, co-founder says

[dhilipkumar]

Santa Clara (CA) – Expanding its business beyond its core strength, microprocessors, has always been difficult for Intel. Trends have been followed and abandoned again in the past and now it is time to consider a new business field for the company, co-founder, former chairman and CEO Andy Grove says: Car batteries.

Grove, who led Intel through its most successful growth face in the 1990s, mentioned this idea during a conversation with the Wall Street Journal. In his view, Intel should take advantage of a major business opportunity and become a leading manufacturer of advanced batteries for plug-in electric vehicles. 

According to the article, Grove, who retired in 2005, still advises Intel's leadership, as does Gordon Moore, and he is apparently urging the current CEO Paul Otellini to take Intel go into the battery business. As of now, it is unclear if Otellini will follow Grove's advice, but if he did, it would certainly be a rather unusual strategic move.

In the early 2000s, Intel tried to become a consumer electronics manufacturer with Intel-branded toys and MP3 players. The strategy was quickly shelved again. And more recently, Intel sold off business units that did not directly fit into its core business of microprocessors, chipsets and wireless chips anymore. Intel has been expanding again more recently, but focused on areas that are closely tied to its chip business – for example the upcoming Larrabee discrete graphics card. After selling its Xscale mobile processor business in 2006 to Marvell, the company recently tried to come up with a much more convincing product, the Atom processor, but may hit some roadblocks with its MID platform idea.

The charismatic Grove, now 72, is known as one of the brilliant minds in Silicon Valley and he may have the right idea with his envisioned battery business – a product category car manufacturers are clearly struggling with. The 2010 Chevy Volt, for example, is rumored to only achieve one hour of battery time from its battery unit. Grove is also known to be interested in cars, driving a tweaked Toyota Prius plug-in hybrid.

If Intel really goes into battery manufacturing, the company has options to do this via an investment, a joint-venture or all by itself. There is no question that Intel can afford to go into this business. However, some may doubt that such a move actually makes sense.