Introduction
Intel (Intel Corporation) is an American manufacturer of semiconductor computer circuits. It is headquartered in Santa Clara, California. The company’s name comes from “integrated electronics.”
Beginnings
Intel was founded in July 1968 by American engineers Gordon Moore and Robert Noyce. Unlike the archetypal Silicon Valley start-up business with its fabled origins in a youthful founder’s garage, Intel opened its doors with $2.5 million in funding arranged by Arthur Rock, the American investor who coined the term venture capitalist. Intel’s patrons were experienced, middle-aged technologists who had built reputations. Noyce was the co-inventor in 1959 of the silicon integrated circuit when he was appointed as general manager of Fairchild Semiconductor, a part of Fairchild Camera and Instrument. Moore was the administrator of research and development at Fairchild Semiconductor. Shortly after founding Intel, Noyce and Moore hired other Fairchild employees, including Hungarian-born US businessman Andrew Grove. Noyce, Moore, and Grove served as director and chief executive officer (CEO) in continuation during the first three decades of the company’s history.
Early Products
Intel’s initial products were memory chips, including the world’s first metal oxide semiconductor, 1101, which did not sell well. However, its sibling, 1103, a one-kilobit dynamic random-access memory (DRAM) chip, was unbeaten and the very first chip to store a significant amount of information. It was initially purchased by the American technology company Honeywell Incorporated in 1970 to renew the core memory technology in its computers. Because the price of DRAMs was reasonable and it used less power than core memory, they quickly became the conventional memory devices in computers worldwide.
Following its DRAM success, Intel became public in 1971. That same year Intel launched the erasable programmable read-only memory (EPROM) chip, that was the company’s most successful output line until 1985. Also in 1971 Intel engineers Ted Hoff, Federico Faggin, and Stan Mazor made a general-purpose four-bit microprocessor and the first single-chip microprocessor, the 4004, under an agreement to the Japanese calculator maker company Nippon Calculating Machine Corporation, which let Intel preserve all rights to the technology.
Not all of Intel’s early endeavours were successful. In 1972 management decided to enter the growing digital watch market by purchasing Microma. But Intel had no real judgment of customers and sold the watchmaking firm in 1978 at a loss of $15 million. In 1974 Intel controlled 82.9 percent of the DRAM chip market, but, with the rise of foreign semiconductor companies, the company’s market share dipped to 1.3 per cent by 1984. By that time, however, Intel had moved from memory chips and become concentrated on its microprocessor business: in 1972 it produced the 8008, an eight-bit central processing unit (CPU); the 8080, which was 10 times faster than the 8008, came two years later; and in 1978 the company built its first 16-bit microprocessor, the 8086.
In 1981 the American computer manufacturer International Business Machines (IBM) chose Intel’s 16-bit 8088 to be the CPU in its first mass-produced personal computer (PC). Intel also provided its microprocessors to other manufacturers that made PC “clones” that were compatible with IBM’s product. The IBM PC and its clones ignited the demand for desktop and portable computers. IBM had contracted with a small firm in Redmond, Washington, Microsoft Corporation, to provide the disk operating system (DOS) for its PC. Eventually, Microsoft supplied its Windows operating system to IBM PCs, which, with a combination of Windows software and Intel chips, were dubbed “Wintel” machines and have dominated the market since their inception.
Of the many microprocessors Intel has produced, perhaps the most important was the 80386, a 32-bit chip released in 1985 that started the company’s commitment to making all future microprocessors backwards-compatible with previous CPUs. Application developers and PC owners could then be assured that software that worked on older Intel machines would run on the newest models.
Pentium Microprocessor
With the introduction of the Pentium microprocessor in 1993, Intel left behind its number-oriented product naming conventions for trademarked names for its microprocessors. The Pentium was the first Intel chip for PCs to use parallel, or superscalar, processing, which significantly increased its speed. It had 3.1 million transistors, compared with the 1.2 million transistors of its predecessor, the 80486. Combined with Microsoft’s Windows 3.x operating system, the much faster Pentium chip helped spur the significant expansion of the PC market. Although businesses still bought most PCs, the higher-performance Pentium machines made it possible for consumers to use PCs for multimedia, graphical applications such as games like Doom and Wing Commander that required more processing power.
Intel’s business strategy relied on making newer microprocessors dramatically faster than previous ones to entice buyers to upgrade their PCs. One way to accomplish this was to manufacture chips with vastly more transistors in each device. For example, the 8088 found in the first IBM PC had 29,000 transistors, while the 80386 unveiled four years later included 275,000, and the Core 2 Quad introduced in 2008 had more than 800,000,000 transistors. The Itanium 9500, which was released in 2012, had 3,100,000,000 transistors. This growth in transistor count became known as Moore’s law, named after company co-founder Gordon Moore, who observed in 1965 that the transistor count on a silicon chip would double approximately annually; he revised it in 1975 to a doubling every two years.
In order to increase consumer brand awareness, in 1991 Intel began subsidizing computer advertisements on the condition that the ads included the company’s “Intel inside” label. Under the cooperative program, Intel set aside a portion of the money that each computer manufacturer spent annually on Intel chips, from which Intel contributed half the cost of that company’s print and television ads during the year. Although the program directly cost Intel hundreds of millions of dollars each year, it had the desired effect of establishing Intel as a conspicuous brand name.
Intel’s famed technical prowess was not without mishaps. Its greatest mistake was the so-called “Pentium flaw,” in which an obscure segment among the Pentium CPU’s 3.1 million transistors performed division incorrectly. Company engineers discovered the problem after the product’s release in 1993 but decided to keep quiet and fix the problem in updates to the chip. However, mathematician Thomas Nicely of Lynchburg College in West Virginia also discovered the flaw. At first Grove (then CEO) resisted requests to recall the product. But when IBM announced it would not ship computers with the CPU, it forced a recall that cost Intel $475 million.
Although bruised by the Pentium fiasco, the combination of Intel technology with Microsoft software continued to crush the competition. Rival products from the semiconductor company Advanced Micro Devices (AMD), the wireless communications company Motorola, the computer workstation manufacturer Sun Microsystems, and others rarely threatened Intel’s market share. As a result, the Wintel duo consistently faced accusations of being monopolies. In 1999 Microsoft was found guilty in a U.S. district court of being a monopolist after being sued by the Department of Justice, while in 2009 the European Union fined Intel $1.45 billion for alleged monopolistic actions. In 2009 Intel also paid AMD $1.25 billion to settle a decades-long legal dispute in which AMD accused Intel of pressuring PC makers not to use the former’s chips.
Main Competitors of Intel
Intel Corporation (INTC) is an American multinational corporation and the largest publicly traded semiconductor chip maker in the United States. It has six distinct operating segments, with at least one competitor in each.
In the PC client operating and revenue segment, Intel Corporation’s most significant rivals are personal computer processor manufacturer Advanced Micro Devices; American multinational technology company IBM; and graphics processors and system-on-a-chip unit manufacturer, Nvidia.
In the DEG microprocessor segment, Intel’s one major competitor is Microchip Technology (MCHP), an American producer of microcontrollers, memory and analogue semiconductors.
In the DEG chipset, motherboard and another segment, Advanced Micro Devices (AMD) is Intel’s most formidable rival overall. This competitor, previously mentioned as a rival in the PC client market segment, competes with Intel in several key markets.
In the data centre group segment, Intel’s primary competitors include EMC Corporation, an information infrastructure company; LSI Logic, which was acquired by Avago Technologies (AVGO) in May of 2014; computer storage and data management company, NetApp; and PMC-Sierra, the MIPS processor, and semiconductor producing company. Other significant rivals in this market segment include application delivery networking product producer, F5 Networks; American multinational computer technology company, Oracle (ORCL); and IBM (IBM).
In the flash memory segment, Intel has two competitors: the previously mentioned semiconductor company, Microchip Technology, and Micron Technology, the Boise, Idaho based semiconductor manufacturer that produces several types of memory.
Several competitors share the marketplace with Intel in the software services group, including Symantec, best-known for its security and backup services; cloud service provider Akamai Technologies (AKAM); designer and manufacturer of Internet protocol-based devices Cisco Systems (CSCO); independent software company, CA Technologies; and American software company, PTC. Several of the most well-known tech companies in the world also compete with Intel in this market, including computer giant Hewlett-Packard, software titan Microsoft and perhaps the most dominant tech company in the world, Google (GOOG).
