Intel Corporation Ba401


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Intel Corporation Ba401

  1. 1. Introduction  Intel decide to exit DRAM business on 1985.  In 1987, Intel began to emerge from recession Growth of Intel 386.  Andy Groove wondered of “new” Intel, late in 1990 with strategy on: 1. Intel of 1990s should be dominant in the EPROM business. 2. Emergence of RISC architecture. 3. The growing importance of company’s relation with its customers
  2. 2. DRAMS in 1990  Andy Groove proclamation : “Welcome to the mainstream of Intel” Sun Lin Chou quote: “DRAM business would not lead to a big business”  By 1990, DRAM $ 8 Billion market: 1. Japan 87% 2. US 8% 3. Korean 5% (will be increase)  Dramatic incline on US DRAM industry, predict the downfall of the entire US semiconductor industry.
  3. 3. New Technology drivers  Sun Lin Chou said it was typical for DRAMs to proceed logic products in linewidth reduction by at least one year  In 1990 , Sun Lin Chou expressed some skepticism in discussing the cumulative volumn model for learning in the semiconductor industry Craige Barret , executive vice president and General manager of the Microcomputer Component Group , believed the importance of DRAMs to technology leader-ship had been overestimated by most industry observes Gerry Parker , vice president of Technology Development , had a slightly difference perspective on the issue of technology driver
  4. 4. EPROM End of 1986, Intel’s only memory businesses was in EPROM. Intel successfully on EPROM business through action taken by the US government In 1986, Intel manager recommend to maintain its position in the EPROM business. In 1986, Intel remained the EPROM market leader with 21% from $ 1 billion market.
  5. 5. Flash  Intel middle manager also recommended business action on Flash.  Flash is actually a simpler-to- manufacturer.  Flash used on parallel processor or neutral network and can lead on portable to hand- held units business.  By 1990, began considerable Flash as replacement for conventional magnetic disk drive.
  6. 6. New Microprocessor strategy  In October 1985 Intel made decision to close Fab 5 in Oregon for DRAM production , it announce shipment of the 32-bit 80386  The electronics industry received the 386 TM microprocessor with great enthusiasm  The power of the 386’s ability to leverage previous software led to the most rapid ramp up of production for any microprocessor in Intel’s history  A new corporate strategy added to Intel’s early success with the 80386
  7. 7. New Microprocessor strategy  Craig Barret described some of the factors which figured in the decision  Bob Reed , chief financial officer , underlined the importance of intellectual property to Intel and to the semiconductor industry.  In order to support the sole-sourcing strategy, Intel converted their new Israel facility, originally designed for EPROMs, to make microprocessor products.  Silicon trends and PC Integration
  8. 8. RISC Versus CISC  By 1990 , Intel had established a dominant position in the personal computer microprocessor business based on CISC (complex instruction set computing) design.  During 1990, NCR was the first Intel customer to decide to use Intel microprocessors throughout its entire product line. Some analysts believed that Intel’s penetration in CISC – microprocessor market would continue throughout the 1990s
  9. 9. RISC Versus CISC  A new market for microprocessors led to the proliferation of microprocessor designs.  Scott McNealy, president of Sun Microsystems , believed that Intel was charging too much for its processors.  He initiated the development of news processor using a computing architecture called RISC.  Following a strategy of “open” standards, he made the sun RISC chip design (SPARC) available to his competitor.
  10. 10. RISC Versus CISC  SPARC chip had reached the market place by 1990 , including offerings from MIPS and Motorola.  RISC chip was capable of supporting some version of UNIX operating system environment.  The success of RISC versus CISC is likely to depend on whether a total seamless software bridge can be run fast enough on UNIX-based machines
  11. 11. The i860 Story In 1988, Intel’s official response it RISC architecture was to call it “the technology of the have nots.”  As several companies announced new RISC chips, Intel developed and internal jargon referring to the competitor chips as YARPs, for “yet another RISC processor”  A designer named Les Kohn had been trying for several years to initiate a RISC program  During the development of the RISC chip , it was code named the N10, and perceived by the top management as a coprocessor for the i486
  12. 12. The i860 Story  The N10 has a 64 bit architecture with floating point and integer processing as well as enhanced graphics capability.  In February 1989 , Intel announced the I860 not as a co-processor , but rather as a stand-alone RISC processor. Craig Barret viewed the I860 as a past of rational strategy having emerged through the championing of a top-flight engineer.
  13. 13. System business In 1985 , Les Vadasz became senior vice president and general manager of the Intel Systems Business . In 1988 , the business have nearly kept pace with the dramatic microprocessor growth so that it announced for about $750 million of Intel’s $2.8 billion in sales.
  14. 14. System business In 1990 , it was expected to contribute over $1 billion  In 1985 , top management had made the strategic decision to increase the systems business share of total revenue.  Some industry observes believed Intel’s Systems Business represented a bold strategy which could alienate its customers.