Intel Corporation (NASDAQ: INTC, SEHK: 4335), founded in 1968 as Integrated Electronics Corporation, is the world's largest semiconductor company. Intel is best known for its PC microprocessors, where it maintains roughly 80% market share.

Intel also makes motherboard chipsets, network cards and other networking ICs, flash memory, embedded processors, and other devices related to communications and computing. Intel's core competency is based not only in its chip design capability but in its world class manufacturing operation; the company is at the leading edge of advanced process technology and also has advanced research projects in all aspects of semiconductor manufacturing, including MEMS.

Overview

Intel was founded in 1968 by Gordon E. Moore (a chemist and physicist) and Robert Noyce (a physicist and co-inventor of the integrated circuit) when they left Fairchild Semiconductor. It is noteworthy that Intel competitor AMD was also founded by members of the Traitorous Eight, in 1969. Intel's employee number four was Andy Grove (a chemical engineer), who ran the company through much of the 1980s and the high-growth 1990s. It is Grove who is now remembered as the company's key leader. By the end of the 1990s, Intel was one of the largest and most successful businesses in the world, though fierce competition within the semiconductor industry has somewhat since diminished its position.

Competitors

During the Eighties, Intel was among the Top Ten of the worldwide semiconductor sales leaders (10th in 1987), dominated by Japanese chip makers. In 1991, Intel achieved the number one ranking and has held it ever since. Other top semiconductor companies include Samsung, Texas Instruments, Toshiba and STMicroelectronics. For more information, refer to the Worldwide Top 20 Semiconductor Market Share Ranking Year by Year.
In terms of direct competitors, Intel's chief rival in PC microprocessors is Advanced Micro Devices (AMD). Competitors in PC chipsets include Via, SiS, ATI, and NVIDIA. Intel's competitors in networking include Freescale, Broadcom, Marvell, and AMCC, and its competitors in flash memory include Spansion, Samsung, Toshiba, STMicroelectronics, and Hynix.

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.

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 exploded in the late 1980s and 1990s, Intel was one of the primary beneficiaries.

Partnership with Apple

On June 6, 2005, Apple Computer CEO Steve Jobs announced that Apple would be transitioning from its long favored PowerPC architecture to the Intel X86 architecture. Reasons stated for the change were vague but included thermal issues with recent PowerPC G5 chips and an implication that the future PowerPC roadmap was unable to satisfy Apple's needs for computing power. In particular, the large power requirement of the G5 chip and subsequent heat generation was seen as a major stumbling block, preventing the placement of such a chip in one of Apple's laptop computers. The first Apple computers containing Intel CPUs were announced on January 10, 2006. Apple initially planned to put Intel chips in all of their computers by the end of 2007,^[1] but according to Jobs, the transition will now be complete by the end of 2006.^[2]

Competition and antitrust

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 it controlled over 85% of the market for 32-bit PC microprocessors) 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.

The only major competitor to Intel on the x86 processor market is Advanced Micro Devices (AMD), with which Intel has had full cross-licensing agreements since 1976: each partner can use the other's patented technological innovations without charge. Some smaller competitors such as VIA and Transmeta produce low-power processors for small factor computers and portable equipment.

A case of industrial espionage arose in 1995 that involved both Intel and AMD. Guillermo Gaede, an Argentine national formerly employed both at AMD and at Intel's Arizona plant, plead guilty in March 1996 of attempting in 1993 to sell the i486 and Pentium designs to AMD and to certain foreign powers^{[3] [4]}. Gaede videotaped data from his computer screen at Intel and mailed it to AMD, which alerted Intel and authorities, resulting in Gaede's arrest ^[5].

Intel filed its response ^[6] in September to AMD's lawsuit and refuted AMD's claims, stating that its business practices are fair and lawful. In its rebuttal, Intel laid out the skeleton of its legal defense, which included a deconstruction of AMD's offensive strategy and levied the charge that AMD's long-struggling market position is largely a result of bad business decisions and management incompetence, including underinvestment in essential manufacturing capacity and overreliance on outsourcing chip foundries ^[7].

Legal experts predict the lawsuit will most likely drag out for a number of years, since Intel's response indicates they are not likely to try and settle with AMD.

Leadership

Robert Noyce was Intel's CEO at its founding in 1969, 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 1997 Grove succeeded Moore as Chairman, and Craig Barrett, already company president, took over. 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, and Barrett replaced Grove as Chairman of the Board. Grove stepped down as Chairman, but will be retained as a special advisor.