Intel Corporation

Intel Corporation (NASDAQ: INTC; SEHK: 4335; Euronext: INCO) is an American global technology company and the world's largestsemiconductor chip maker, based on revenue. It is the inventor of the x86 series of microprocessors, the processors found in most personal computers. Intel was founded on July 18, 1968, as Integrated Electronics Corporation (though a common misconception is that "Intel" is from the word intelligence) and is based in Santa Clara, California, USA (Dell XPS M1210 Battery) .

Intel also makes motherboard chipsets, network interface controllers and integrated circuits, flash memory,graphic chips, embedded processors and other devices related to communications and computing. Founded by semiconductor pioneers Robert Noyce andGordon Moore and widely associated with the executive leadership and vision of Andrew Grove, Intel combines advanced chip design capability with a leading-edge manufacturing capability (Dell Studio XPS 1340 Battery) .

Originally known primarily to engineers and technologists, Intel's "Intel Inside" advertising campaign of the 1990s made it and its Pentium processor household names.

Intel was an early developer of SRAM and DRAM memory chips, and this represented the majority of its business until 1981. While Intel created the first commercial microprocessor chip in 1971, it was not until the success of the personal computer (PC) that this became their primary business (Dell Studio XPS 1640 Battery) .

During the1990s, Intel invested heavily in new microprocessor designs fostering the rapid growth of the PC industry. During this period Intel became the dominantsupplier of microprocessors for PCs, and was known for aggressive and sometimes controversial tactics in defense of its market position, particularly against AMD, as well as a struggle with Microsoft for control over the direction of the PC industry (Dell Vostro 1710 Battery) .

The 2010 rankings of the world's 100 most powerful brands published by Millward Brown Optimor showed the company's brand value at number 48.

Intel has also begun research in electrical transmission and generation.

Corporate history

Origins and early years

Intel headquarters in Santa Clara, CA, USA (ASUS EEE PC900 battery)

Intel was founded in 1968 by Gordon E. Moore (of "Moore's Law" fame, a chemist and physicist) and Robert Noyce (a physicist and co-inventor of the integrated circuit) when they left Fairchild Semiconductor. A number of other Fairchild employees also went on to participate in other Silicon Valley companies. Intel's third employee was Andy Grove, a chemical engineer, who ran the company through much of the 1980s and the high-growth 1990s (Dell RM791 battery) .

Grove is now remembered as the company's key business and strategic leader. By the end of the 1990s, Intel was one of the largest and most successful businesses in the world.

Origin of the name

At its founding, Gordon Moore and Robert Noyce wanted to name their new company Moore Noyce (Sony VGP-BPS13 battery) .

The name, however, was a homophone (words that sound similar) for more noise — an ill-suited name for an electronics company, since noise in electronics is usually very undesirable and typically associated with badinterference. They used the name NM Electronics for almost a year, before deciding to call their company Integrated Electronics or Intel for short (Sony VGP-BPL9 battery) .

However, Intel was already trademarked by a hotel chain, so they had to first buy the rights for the name.

Early history

Intel has grown through several distinct phases. At its founding, Intel was distinguished simply by its ability to make semiconductors, and its primary products were static random access memory(SRAM) chips. Intel's business grew during the 1970s as it expanded and improved its manufacturing processes and produced a wider range of products, still dominated by various memory devices (Sony VGP-BPL11 battery) .

While Intel created the first commercially available microprocessor (Intel 4004) in 1971 and one of the first microcomputers in 1972, by the early 1980s its business was dominated by dynamic random access memory chips. However, increased competition from Japanese semiconductor manufacturers had, by 1983, dramatically reduced the profitability of this market, and the sudden success of the IBM personal computer convinced then-CEO Grove to shift the company's focus to microprocessors, and to change fundamental aspects of that business model (Sony VGP-BPL15 battery) .

By the end of the 1980s this decision had proven successful. Buoyed by its fortuitous position as microprocessor supplier to IBM and its competitors within the rapidly growing personal computer market, Intel embarked on a 10-year period of unprecedented growth as the primary (and most profitable) hardware supplier to the PC industry. By the end of the 1990s, its line of Pentium processors had become a household name (Dell Inspiron E1505 battery) .

Slowing demand and challenges to dominance

After 2000, growth in demand for high-end microprocessors slowed. Competitors, notably AMD (Intel's largest competitor in its primary x86 architecture market), garnered significant market share, initially in low-end and mid-range processors but ultimately across the product range, and Intel's dominant position in its core market was greatly reduced (Dell Latitude E6400 battery) .

In the early 2000s then-CEO Craig Barrett attempted to diversify the company's business beyond semiconductors, but few of these activities were ultimately successful.

Intel had also for a number of years been embroiled in litigation (HP Pavilion dv6000 Battery) .

US law did not initially recognize intellectual property rights related to microprocessor topology (circuit layouts), until the Semiconductor Chip Protection Act of 1984, a law sought by Intel and the Semiconductor Industry Association (SIA). During the late 1980s and 1990s (after this law was passed) Intel also sued companies that tried to develop competitor chips to the 80386 CPU (Sony Vaio VGN-FZ31S battery) .

The lawsuits were noted to significantly burden the competition with legal bills, even if Intel lost the suits. Antitrust allegations that had been simmering since the early 1990s and already been the cause of one lawsuit against Intel in 1991, broke out again as AMD brought further claims against Intel related to unfair competition in 2004, andagain in 2005 (Sony Vaio VGN-FZ31S battery) .

In 2005, CEO Paul Otellini reorganized the company to refocus its core processor and chipset business on platforms (enterprise, digital home, digital health, and mobility) which led to the hiring of over 20,000 new employees. In September 2006 due to falling profits, the company announced a restructuring that resulted in layoffs of 10,500 employees or about 10 percent of its workforce by July 2006 (Hp pavilion dv6000 battery) .

Regaining of momentum

Faced with the need to regain lost marketplace momentum, Intel unveiled its new product development model to regain its prior technological lead. Known as its "tick-tock model", the program was based upon annual alternation of microarchitecture innovation and process innovation (Sony VGN-FW11S Battery) .

In 2006, Intel produced P6 and NetBurst products with reduced die size (65 nm). A year later it unveiled its Core microarchitecture to widespread critical acclaim; the product range was perceived as an exceptional leap in processor performance that at a stroke regained much of its leadership of the field (Sony VGP-BPS13A/B Battery) .

In 2008, we saw another "tick", Intel introduced the Penryn microarchitechure,undergoing a shrink form 65 nm to 45 nm , and the year after saw the release of its positively reviewed successor processor, Nehalem, followed by another silicon shrink to the 32nm process (Sony VGP-BPS13B/B Battery) .

Intel was not the first microprocessor corporation to do this. For example, around 1996 graphics chip designers nVidia had addressed its own business and marketplace difficulties by adopting a demanding 6-month internal product cycle whose products repeatedly outperformed market expectation (Toshiba Satellite P10 Battery) .

Sale of XScale processor business

On June 27, 2006, the sale of Intel's XScale assets was announced. Intel agreed to sell the XScale processor business to Marvell Technology Group for an estimated $600 million (They bought them for $1.6billion) in cash and the assumption of unspecified liabilities. The move was intended to permit Intel to focus its resources on its core x86 and server businesses, and the acquisition completed on November 9, 2006 (SONY VAIO VGN-FZ210CE Battery) .

Acquisition of McAfee - Performance, Power and now Protection

On 19 August 2010, Intel announced that it planned to purchase McAfee, a manufacturer of computer security technology. The purchase price was $7.68 billion, and the companies said that if the deal were approved, new products would be released early in 2011.[24] This is the largest acquisition ever in information security industry and largest ever in Intel's 42-year history (SONY VAIO VGN-FZ38M Battery) .

Product and market history

SRAMS and the microprocessor

The company's first products were shift register memory and random-access memory integrated circuits, and Intel grew to be a leader in the fiercely competitive DRAM, SRAM, and ROM markets throughout the 1970s. Concurrently, Intel engineers Marcian Hoff, Federico Faggin, Stanley Mazor and Masatoshi Shima invented Intel's first microprocessor (SONY VAIO VGN-FZ31z Battery) .

Originally developed for the Japanese company Busicom to replace a number of ASICs in a calculator already produced by Busicom, the Intel 4004 was introduced to the mass market on November 15, 1971, though the microprocessor did not become the core of Intel's business until the mid-1980s. (Note: Intel is usually given credit with Texas Instruments for the almost-simultaneous invention of the microprocessor (SONY VAIO VGN-FZ31E Battery) .

From DRAM to microprocessors

In 1983, at the dawn of the personal computer era, Intel's profits came under increased pressure from Japanese memory-chip manufacturers, and then-President Andy Grove drove the company into a focus on microprocessors. Grove described this transition in the book Only the Paranoid Survive. A key element of his plan was the notion, then considered radical, of becoming the single source for successors to the popular 8086 microprocessor (SONY VAIO VGN-FZ31J Battery) .

Until then, manufacture of complex integrated circuits was not reliable enough for customers to depend on a single supplier, but Grove began producing processors in three geographically distinct factories, and ceased licensing the chip designs to competitors such as Zilog and AMD. When the PC industry boomed in the late 1980s and 1990s, Intel was one of the primary beneficiaries (SONY VAIO VGN-FZ31M Battery) .

Intel, x86 processors, and the IBM PC

The die from an Intel 8742, an 8-bit microcontroller that includes a CPU running at 12 MHz, 128 bytes of RAM, 2048 bytes ofEPROM, and I/O in the same chip.

Despite the ultimate importance of the microprocessor, the 4004 and its successors the 8008 and the 8080 were never major revenue contributors at Intel (SONY VAIO VGN-FZ31B Battery) .

As the next processor, the 8086 (and its variant the 8088) was completed in 1978, Intel embarked on a major marketing and sales campaign for that chip nicknamed "Operation Crush", and intended to win as many customers for the processor as possible. One design win was the newly created IBM PCdivision, though the importance of this was not fully realized at the time (SONY VGP-BPS13 Battery) .

IBM introduced its personal computer in 1981, and it was rapidly successful. In 1982, Intel created the 80286 microprocessor, which, two years later, was used in the IBM PC/AT. Compaq, the first IBM PC "clone" manufacturer, produced a desktop system based on the faster 80286 processor in 1985 and in 1986 quickly followed with the first 80386-based system, beating IBM and establishing a competitive market for PC-compatible systems and setting up Intel as a key component supplier (Dell Precision M70 Battery) .

In 1975 the company had started a project to develop a highly advanced 32-bit microprocessor, finally released in 1981 as the Intel iAPX 432. The project was too ambitious and the processor was never able to meet its performance objectives, and it failed in the marketplace. Intel extended the x86 architectureto 32 bits instead (Acer Aspire One battery) .

386 microprocessor

During this period Andrew Grove dramatically redirected the company, closing much of its DRAM business and directing resources to the microprocessorbusiness. Of perhaps greater importance was his decision to "single-source" the 386 microprocessor. Prior to this, microprocessor manufacturing was in its infancy, and manufacturing problems frequently reduced or stopped production, interrupting supplies to customers (Toshiba Satellite L305 Battery) .

To mitigate this risk, these customers typically insisted that multiple manufacturers produce chips they could use to ensure a consistent supply. The 8080 and 8086-series microprocessors were produced by several companies, notably AMD. Grove made the decision not to license the 386 design to other manufacturers, instead producing it in three geographically distinct factories in Santa Clara, California; Hillsboro, Oregon; and the Phoenix, Arizona suburb of Chandler; and convincing customers that this would ensure consistent delivery (Toshiba Satellite M65 battery)

. As the success of Compaq's Deskpro 386 established the 386 as the dominant CPU choice, Intel achieved a position of near-exclusive dominance as its supplier. Profits from this funded rapid development of both higher-performance chip designs and higher-performance manufacturing capabilities, propelling Intel to a position of unquestioned leadership by the early 1990s (Toshiba Satellite T4900 Battery) .

486, Pentium, and Itanium

Intel introduced the 486 microprocessor in 1989, and in 1990 formally established a second design team, designing the processors code-named "P5" and "P6" in parallel and committing to a major new processor every two years, versus the four or more years such designs had previously taken. The P5 was earlier known as "Operation Bicycle" referring to the cycles of the processor (Toshiba PA3399U-2BRS battery) .

The P5 was introduced in 1993 as the Intel Pentium, substituting a registered trademark name for the former part number (numbers, such as 486, are hard to register as a trademark). The P6 followed in 1995 as the Pentium Pro and improved into the Pentium II in 1997. New architectures were developed alternately in Santa Clara, California and Hillsboro, Oregon (Dell Latitude E6400 battery) .

The Santa Clara design team embarked in 1993 on a successor to the x86 architecture, codenamed "P7". The first attempt was dropped a year later, but quickly revived in a cooperative program withHewlett-Packard engineers, though Intel soon took over primary design responsibility. The resulting implementation of the IA-64 64-bit architecture was the Itanium, finally introduced in June 2001 (Toshiba Satellite A200 Battery) .

The Itanium's performance running legacy x86 code did not achieve expectations, and it failed to compete effectively with 64-bit extensions to the original x86 architecture, introduced by AMD, named x86-64 (although Intel uses the name Intel 64, previously EM64T). As of 2009, Intel continues to develop and deploy the Itanium.

The Hillsboro team designed the Willamette processors (code-named P67 and P68) which were marketed as the Pentium 4 (Toshiba Satellite 1200 Battery) .

Pentium flaw

Main article: Pentium FDIV bug

In June 1994, Intel engineers discovered a flaw in the floating-point math subsection of the P5 Pentium microprocessor. Under certain data dependent conditions, low order bits of the result of floating-point division operations would be incorrect, an error that can quickly compound in floating-point operations to much larger errors in subsequent calculations. Intel corrected the error in a future chip revision, but nonetheless declined to disclose it (Toshiba NB100 Battery) .

In October 1994, Dr. Thomas Nicely, Professor of Mathematics at Lynchburg College independently discovered the bug, and upon receiving no response from his inquiry to Intel, on October 30 posted a message on the Internet. Word of the bug spread quickly on the Internet and then to the industry press. Because the bug was easy to replicate by an average user (there was a sequence of numbers one could enter into the OS calculator to show the error), Intel's statements that it was minor and "not even an erratum" were not accepted by many computer users (Toshiba Satellite M300 Battery) .

During Thanksgiving 1994, The New York Times ran a piece by journalist John Markoff spotlighting the error. Intel changed its position and offered to replace every chip, quickly putting in place a large end-user supportorganization. This resulted in a $500 million charge against Intel's 1994 revenue (Dell INSPIRON 1525 battery) .

Ironically, the "Pentium flaw" incident, Intel's response to it, and the surrounding media coverage propelled Intel from being a technology supplier generally unknown to most computer users to a household name. Dovetailing with an uptick in the "Intel Inside" campaign, the episode is considered to have been a positive event for Intel, changing some of its business practices to be more end-user focused and generating substantial public awareness, while avoiding a lasting negative impression (Dell Inspiron Mini 10 Battery) .

Intel Inside, Intel Systems Division, and Intel Architecture Labs

During this period, Intel undertook two major supporting programs that helped guarantee their processor's success. The first is widely known: the 1991 "Intel Inside" marketing and branding campaign. The idea of ingredient branding was new at the time with only Nutrasweet and a few others making attempts at that (Dell Latitude D830 Battery) .

This campaign established Intel, which had been a component supplier little-known outside the PC industry, as a household name. The second program is little-known: Intel's Systems Group began, in the early 1990s, manufacturing PC "motherboards", the main board component of a personal computer, and the one into which the processor (CPU) and memory (RAM) chips are plugged (Dell Studio 1735 Battery) .

Shortly after, Intel began manufacturing fully configured "white box" systems for the dozens of PC clone companies that rapidly sprang up. At its peak in the mid-1990s, Intel manufactured over 15% of all PCs, making it the third-largest supplier at the time.

During the 1990s, Intel's Architecture Lab (IAL) was responsible for many of the hardware innovations of the personal computer, including the PCI Bus, the PCI Express (PCIe) bus (Dell Latitude D620 Battery) ,

the Universal Serial Bus (USB), Bluetooth wireless interconnect, and the now-dominant architecture for multiprocessor servers.IAL's software efforts met with a more mixed fate; its video and graphics software was important in the development of software digital video, but later its efforts were largely overshadowed by competition from Microsoft. The competition between Intel and Microsoft was revealed in testimony by IAL Vice-President Steven McGeady at the Microsoft antitrust trial (SONY VAIO VGN-FZ150E Battery) .

Competition, antitrust and espionage

Two factors combined to end this dominance: the slowing of PC demand growth beginning in 2000 and the rise of the low cost PC. By the end of the 1990s, microprocessor performance had outstripped software demand for that CPU power. Aside from high-end server systems and software, demand for which dropped with the end of the "dot-com bubble", consumer systems ran effectively on increasingly low-cost systems after 2000 (Dell Studio 1555 Battery) .

Intel's strategy of producing ever-more-powerful processors and obsoleting their predecessors stumbled, leaving an opportunity for rapid gains by competitors, notably AMD. This in turn lowered the profitability of the processor line and ended an era of unprecedented dominance of the PC hardware by Intel (Dell Latitude D610 Battery) .

Intel's dominance in the x86 microprocessor market led to numerous charges of antitrust violations over the years, including FTC investigations in both the late 1980s and in 1999, and civil actions such as the 1997 suit by Digital Equipment Corporation (DEC) and a patent suit by Intergraph. Intel's market dominance (at one time[when?] it controlled over 85% of the market for 32-bit x86microprocessors) combined with Intel's own hardball legal tactics (such as its infamous 338 patent suit versus PC manufacturers) made it an attractive target for litigation, but few of the lawsuits ever amounted to anything (Dell Inspiron 300M Battery) .

A case of industrial espionage arose in 1995 that involved both Intel and AMD. Bill Gaede, an Argentine formerly employed both at AMD and at Intel's Arizona plant, was arrested for attempting in 1993 to sell the i486 and P5 Pentium designs to AMD and to certain foreign powers (Dell Inspiron E1505 battery) .

Gaede videotaped data from his computer screen at Intel and mailed it to AMD, which immediately alerted Intel and authorities, resulting in Gaede's arrest. Gaede was convicted and sentenced to 33 months in prison in June 1996.

Partnership with Apple

For more details on this topic, see Apple–Intel transition.

On June 6, 2005, Apple CEO Steve Jobs announced that Apple would be transitioning from its long favored PowerPC architecture to the Intel x86 architecture, because the future PowerPC road map was unable to satisfy Apple's needs (Dell RM791 battery) .

The first Macintosh computers containing Intel CPUs were announced on January 10, 2006, and Apple had its entire line of consumer Macs running on Intel processors by early August 2006. The Apple Xserve server was updated to Intel Xeon processors from November 2006, and is offered in a configuration similar to Apple's Mac Pro (Dell XPS M1530 battery) .

Core 2 Duo advertisement controversy

In 2007, the company released a print advertisement for its Core 2 Duo processor featuring six African American runners appearing to bow down to a Caucasian male inside of an office setting (due to the posture taken by runners on starting blocks). According to Nancy Bhagat, Vice President of Intel Corporate Marketing, the general public found the ad to be "insensitive and insulting." The campaign was quickly pulled and several Intel executives made public apologies on the corporate website (Dell XPS M2010 battery) .

Classmate PC

Intel's Classmate PC is the company's first low-cost netbook computer.

Corporate affairs

In September 2006, Intel had nearly 100,000 employees and 200 facilities world wide. Its 2005 revenues were $38.8 billion and its Fortune 500 ranking was 49th. Its stock symbol is INTC, listed on theNASDAQ. As of February 2009 the biggest customers of Intel are Hewlett-Packard and Dell (Dell Vostro 1000 battery) .

Leadership and corporate structure

Robert Noyce was Intel's CEO at its founding in 1968, followed by co-founder Gordon Moore in 1975. Andy Grove became the company's President in 1979 and added the CEO title in 1987 when Moore became Chairman. In 1998 Grove succeeded Moore as Chairman, and Craig Barrett, already company president, took over (HP Pavilion dv9000 battery) .

On May 18, 2005, Barrett handed the reins of the company over to Paul Otellini, who previously was the company president and was responsible for Intel's design win in the original IBM PC. The board of directors elected Otellini CEO, and Barrett replaced Grove asChairman of the Board. Grove stepped down as Chairman, but is retained as a special adviser (Sony Vaio VGN-FZ61B battery) .

In May 2009, Barrett stepped down as chairman and Jane Shaw was elected as the new Chairman of the Board.

Current members of the board of directors of Intel are Craig Barrett, Charlene Barshefsky, Susan Decker, James Guzy, Reed Hundt, Paul Otellini, James Plummer, David Pottruck, Jane Shaw, John Thornton, and David Yoffie (HP Pavilion DV7 Battery) .