Intel Corporation is known for it’s innovative successes and the ability to think outside the box. Some of Intel’s sources of competitive advantages in DRAM were that they were able to make a smaller product, they were able to create a complex product that helped deal with the imitation issue and they were able to a more cost effective product. Intel’s sources of competitive advantages for microprocessors on the other hand were different and more effective. They were able to control most of the microprocessor market which eliminated the threat of a hold-up, they were able to eliminate the risk of imitation by copyrights for microprocessor code, and…. What about substitution??? In 1970, dynamic random access memory (DRAM) had many competitive advantages over magnetic core memory. DRAM was not new technology, but no one had figured out how to mass produce it at a low cost. Intel had three different process technologies it was working on to develop DRAM but needed to determine which would give them the best competitive advantage. Multichip assembly was one approach but it was difficult to mass produce while the three-prong circuit version was too simple and could easily be copied by competitors. By creating the metal-oxide-semiconductor (MOS) transistor, Intel had a smaller product that was complex enough to prevent duplication, increase performance, and was more cost effective to build. Another advantage of the MOS technology was that it consumed lower power allowing it to reduce the risk of substitution. The MOS manufacturing process was prone to impurities, but as the process improved and yield rates rose, the MOS semiconductor grew to dominate the IC market. With Intel’s creation of the first one-kilobit DRAM, the 1103 chip, they were able to maintain dominance in the market place for two years. In the early stages of microprocessor technology, Intel was initially behind Motorola even...
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