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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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.