Intel Case

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  • Topic: Intel Corporation, Paul Otellini, X86
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  • Published : May 5, 2012
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201147507 Chinthaka Uduwage
Intel Corp. 1968-2003
• How would you explain Intel’s initial dominance and subsequent decline in DRAMS? Intel was successful at the beginning because of their “Goldlocks strategy”, which they focused on mass production and something that competitors cannot copy easily. Because of this approach Intel was able to produce 1103, world’s first 1 kilobit DRAM. The 1103 was more cost effective to build, smaller and better in performance. The 1103 DRAM was able to replace magnetic core memory. Because of these innovations 1K DRAM was able to dominance the market for two years. Thanks to Noyce, Intel had enough patents to cross-license among established player to build specific DRAMs even though Intel was new. This is also one reason that Intel was successful at the beginning. Japanese larger firms entered in to DRAM business as the demand for DRAMs were huge. And the multibillion dollar Japanese companies like Mitsubishi and Hitachi were able produce more effectively than Intel, which directly impact the cost and these companies were well ahead of Intel in quality also. The close relationship with equipment manufactures helped Japanese DRAM producers to improve their manufacturing process to improve the yield. Because of the large yield difference between Intel and Japanese companies, Intel started to lose the market. Intel’s process of new product introduction was slower than its competitors, such as TI or Mostek. According to Moore, Intel was more than generation behind in developing. Overall because of these issues Intel’s market share declined to a very low position.

• Why has Intel more successful in microprocessors?
 Inetel’s success in microprocessors was started as they were able to sign a deal with IBM as IBM became a Fortune 500-sized company by their PC sales. But Intel’s portion of the total revenue was low. So Intel strategically moved their position in to a strong position by cutting number of licensees. As a result...
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