Intel Company Analysis

Topics: Intel Corporation, Semiconductor sales leaders by year, Microprocessor Pages: 7 (2778 words) Published: May 24, 2011
Maria Dicke
Group E
Bus Adm 799, 5:30 Section
May 12, 2011
Today, Intel is used in many personal computers and lab-tops. The company has made a brand for itself and has been able to sustain ranks among many notable competitors. Today, Intel holds greater than 80 percent of the microprocessors market because of the success of its Pentium chip (Semiconductor 1). This report contains information pertaining to the Intel Company from the beginning and up to 2001. As many computer chip companies Intel had battles being at the top of the competitor’s lists, as well as producing products worth individual attention. This report will give a background of the company, an industry analysis that will explain Intel’s top competitors in detail, a SWOT analysis, a financial analysis and will conclude with suggestions that can help the company grow further. The Intel Corporation began in 1968. Two men are named the founder’s of this company; Robert Noyce, Gordon Moore. Originally, Noyce and Moore wanted to name the company “Moore Noyce” after their names but realized it sounded like “more noise” and was not a suitable name for a computer chip company. The company was then named Intel for “integrated technology.” The early focus of the company was on integrated circuit memory devices. One of the first tasks encountered by Intel was producing a DRAM (dynamic random access memory) with a lower price. In 1970, the 1103 was produced. The 1103 was the world’s first 1-kilobyte DRAM. This undercut prices and had increased performance while being smaller. By 1972 the 1103 was the bestselling semiconductor memory chip in the world and the first commercial computer available was the HP 9800 series. Intel was able to gain market share at this time and this allowed them to continue researching and developing new products. However, by 1978 Intel was a full generation behind the Japanese when it came to the 16K DRAM and by 1984 Intel’s total share in DRAMs was barely 1%. The EPROM was produced and it allowed easy programming and gave users the capability to erase memory with ultraviolet light. It was not until Intel decided to raise the prices of the EPROM technology that it made money and in 1984 the EPROM was Intel’s “money maker.” The microprocessor was invented in 1971 and at that time Intel did not see the potential to use it for personal computers. The 4004 microprocessor was primarily used in calculators but in 1974 the 8080 microprocessor became the standard and Intel became the Industry leader in 8- bit market (Intel 1). Then in 1980, Intel’s 8088 microprocessor was teamed with IBM’s first Personal Computer. This gave Intel a large competitive advantage. Grove stated: “The presence of IBM in the early ‘80s was crucial. By winning that contract, we won the whole industry design.” This led to the development of the 80386, the first 32-bit processor in 1985. The 386 was an instant success and at that time Intel also decided to sole-produce and stop sourcing to AMD. This led to an eight year legal battle that was eventually negotiated in 1995. To continue gaining competitive advantage Intel moved into other markets. In 1998 Intel begins moving into digital photography, video, networking equipment and Internet commerce markets by manufacturing special chips (Intel 1). However, by 2001 Intel announced it was going remain focused on microchips. At that time Intel had a clear competitive advantage over the microchip market. The SIC code for Intel is 3674 for semiconductors and related devices. The NAICS code is 334413 for semiconductor and related device manufacturing. The semiconductor industry is very cyclical. For instance, in the year 1995 sales grew 40% and were up to $150 billion but in 2001sales fell sharply to $139 billion (Semiconductor 1). In order for Intel to gain and maintain market share they needed to have unique success factors. There are many key success factors for Intel. Intel started with...
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