Intel Corporation:Strategy for the 1990s

1. Intel Corporation:
Strategy for the 1990s
Case Study Analysis by:
Djadja Achmad Sardjana

2. 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.

3. 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.

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. Strategic Questions
• What are the long term implications of Intel’s exit
from the DRAM business? How did Grove handle the
situation?
• Compare and contrast the arguments of Chou,
Parket, and Barrett regarding "Technology drivers."
Are these arguments mutually consistent? If not,
who is right? What are the implications for Intel’s
technology strategy?
• How did Kohn succeed in developing a chip? What
are the dangers, if any, of Intel developing the
i860? What are the benefits? If you were Grove,
would you support Kohn.
• Is Intel still a technology leader? How well do the
three corporate macro strategies outlined in the
case serve to guide Intel through the 1990s