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Craig R. Barrett sat reflecting on the fact downturn in economic conditions generthat he was halfway through his tenure ally. There were also weak demand and as the fourth CEO of Intel-only another overcapacity in the semiconductor industhree more years to go until his mandatory try with some researchers expecting a retirement age would be reached. He had 34 percent fall in global sales of chips. come into an organization that Andrew S. Moreover, long-time rival Advanced Grove, chairman of Intel, had shaped into Micro Devices had produced its Athlon a major global technology company. He processor chip, which turned out to be had replaced Gordon E. More but retained faster than Intel's Pentium III chip. At the his principle of doubling microprocessor same time, people seemed to be more performance every 18 months while at interested in how fast their modem conthe same time making it progressively nection was than in the speed of their cheaper. In this context, what would be computer chip. And September 11, 2001, Barrett's legacy? hadn't helped; before this catastrophe When Barrett came in three years ago, Intel's shares, at $26, were down 60 perhe took some bold moves, taking Intel cent compared to their highest over beyond chip making for PCs into the pro- the previous year. After September 11 duction of information and communica- they fell further-by October they were tion appliances as well as services related only $20. to the Internet. Trouble is, the company Barrett felt that in this competitivewas now in the worst shape that it had and segmented-market, Intel needed to been for many years. Of course, every be reorganized to make it more nimble. technology company had been affected It also needed to be reorganized to avoid by September 11,2001, the slowing econ- duplication and create better coordinaomy, and the potential threat of war with tion. For example, the network operaIraq. But in Intel's case this had been tions group and the communications unit