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Company Profile of Intel
Company Profile of Intel - May 10th, 2011
Intel Corporation (NASDAQ: INTC) is an American global technology company and the world's largest semiconductor 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. 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 and Gordon 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. Though Intel was originally known primarily to engineers and technologists, its "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 its primary business. During the 1990s, Intel invested heavily in new microprocessor designs fostering the rapid growth of the computer industry. During this period Intel became the dominant supplier of microprocessors for PCs, and was known for aggressive and sometimes illegal 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. 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. Intel has recently introduced a 3-D transistor that may improve performance and energy efficieny.
Intel Corporation, incorporated in 1968, is a semiconductor chip maker company. The Company develops advanced integrated digital technology products, primarily integrated circuits, for industries, such as computing and communications. The Company designs and manufactures computing and communications components, such as microprocessors, chipsets, motherboards, and wireless and wired connectivity products, as well as platforms that incorporate these components. The Company’s reportable operating segments are PC Client Group (PCCG) and Data Center Group. It also has non-reportable operating segments, whose product lines are based on Intel architecture: Embedded and Communications Group, Digital Home Group and Ultra-Mobility Group. The Company’s NAND Solutions Group, Wind River Software Group, and Software and Services Group segments are included within the other operating segments category. During the year ended fiscal year ended December 25, 2010 (fiscal 2010), it sold its ownership interest in Numonyx B.V. to Micron Technology, Inc. Subsequent to fiscal 2010, the Company divested the Digital Health Group. Subsequent to fiscal 2010, Intel and General Electric Company (GE) formed an equally owned joint venture in the healthcare industry that would focus on independent living and delivery of health-related services via telecommunications. The new company was formed by combining assets of GE Healthcare’s Home Health division and Intel’s Digital Health Group. On January 31, 2011, it completed the acquisition of the Wireless Solutions (WLS) business of Infineon Technologies AG. In February 2011, the Company acquired McAfee, Inc.
The Company offers microprocessors with one or multiple processor cores designed for notebooks, netbooks, desktops, servers, workstations, storage products, embedded applications, communications products, consumer electronics devices and handhelds. The Company’s microprocessors are based on the Intel Core microarchitecture. It also offers System on Chip (SoC) products that integrate its core processing functionalities with other system components, such as graphics, audio and video, onto a single chip to form a purpose-built solution. The Company offers chipsets designed for notebooks, netbooks, desktops, servers, workstations, storage products, embedded applications, communications products, consumer electronics devices and handhelds. It offers motherboard products designed for its desktop, server and workstation platforms. The Company offers wireless and wired connectivity products, including network adapters and embedded wireless cards, based on industry standard protocols used to translate and transmit data across networks. It has also developed wireless connectivity products for both mobile and fixed networks based on WiMAX.
The Company offers features to improve microprocessor and platform capabilities. It also offers technologies that can enable virtualization, in which a single computer system can function as multiple virtual systems by running multiple operating systems and applications. The Company also offers NAND flash memory, software products and software development tools.The Company offers certain software products, including operating systems, middleware, and tools used to develop, run, and manage a variety of enterprise, consumer, embedded, and handheld devices. In addition, it offers software development tools, designed to complement its hardware technologies, that help enable the creation of applications. During fiscal 2010, the revenues of the Company’s PCCG operating segment, DCG operating segment, the other Intel architecture operating segments and all other segments, were 72%, 20%, 4% and 4%, respectively, of its total revenue. The Company sells its products to original equipment manufacturers (OEMs) and original design manufacturers (ODMs).
PC Client Group
The Company’s PCCG offers microprocessors and related chipsets designed for the notebook, netbook and desktop market segments. In addition, PCCG offers motherboards designed for the desktop market segment and wireless connectivity products based on wireless fidelity (WiFi) and WiMAX technologies. As of December25, 2010, it offered a range of microprocessors designed for the notebook, netbook and desktop market segments that includes Intel Core i3 processor, Intel Core i5 processor, Intel Core i7 processor, Intel Core i7 processor Extreme Edition, Intel Atom processor and previous-generation Intel processors. With the Company’s microprocessors, it also offers related chipsets designed for the notebook and netbook market segments, including Mobile Intel 6 Series Express Chipsets, Mobile Intel 5 Series Express Chipsets, Mobile Intel 4 Series Express Chipsets, Mobile Intel 900 Series Express Chipsets, and the Intel NM10 Express Chipset. The desktop market segment includes Intel 6 Series Express Chipsets, Intel 5 Series Express Chipsets, Intel 4 Series Express Chipsets, Intel 3 Series Express Chipsets and the Intel NM10 Express Chipset.
Data Center Group
The DCG offers products that are incorporated into servers, storage, workstations, and other products that help make up the infrastructure for data center and cloud computing environments. DCG’s products include microprocessors and related chipsets, and motherboards and wired connectivity devices. During fiscal 2010, its server, workstation and storage microprocessor offerings included the Intel Xeon processor and the Intel Itanium processor. The Company’s Intel Xeon processor family of products supports a range of entry-level to high-end technical and commercial computing applications, such as Internet Protocol data centers. Its Intel Itanium processor family supports computing performance for data processing and handling high transaction volumes and other compute-intensive applications for enterprise-class servers, as well as supercomputing solutions.
Other Intel Architecture Operating Segments
The ECG offers microprocessors, including Intel Atom processors, and chipsets for a number of embedded applications across numerous market segments, including industrial, medical and in-vehicle infotainment. In addition, ECG offers network processors. The Digital Home Group offers products for use in consumer electronics devices designed to access and share Internet, broadcast, optical media, and personal content through a variety of linked digital devices within the home. The Digital Home Group offers components for consumer electronics devices, such as digital televisions (TVs), high-definition media players, cable modems and set-top boxes, which receive, decode, and convert incoming data signals. During fiscal 2010, it introduced Intel Atom processors designed to enable seamless integration of Internet, television and personal content with search capability. The Ultra-Mobility Group offers Intel Atom processors and related chipsets designed for the handheld market segment. During fiscal 2010, it introduced an Intel Atom processor-based platform, designed for a range of computing devices, including high-end smart phones and other mobile handheld products.
Other Operating Segments
The NAND Solutions Group offers NAND flash memory products primarily used in portable memory storage devices, digital camera memory cards, solid-state drives (SSDs), and other devices. During fiscal 2010, its SSDs were available in densities ranging from 32 gigabytes (GB) to 250 GB. Its NAND flash memory products are manufactured by IM Flash Technologies, LLC (IMFT). During fiscal 2010, the Company introduced 40-GB, 120-GB, and 250-GB SSDs based on 34-nanometer NAND flash technology, designed for laptop and desktop computers. In addition, it introduced 40-GB and 80-GB small-form-factor SSDs based on 34-nanometer NAND flash technology, designed for dual-drive notebooks and all-in-one desktops and tablet computers. The Wind River Software Group develops and licenses device software optimization products, including operating systems, for the needs of customers in the embedded and handheld market segments.
The Company competes with Broadcom Corporation, NVIDIA Corporation, QUALCOMM Incorporated, VIA Technologies, Inc., Advanced Micro Devices, Inc., International Business Machines Corporation, Sony Corporation, Toshiba Corporation, ARM Limited, Oracle Corporation, Freescale Semiconductor, Inc., MediaTek Inc., Samsung Electronics Co., Ltd., STMicroelectronics N.V., Texas Instruments Incorporated, ST-Ericsson N.V., Silicon Integrated Systems Corporation, SanDisk Corporation, Atheros Communications, Inc., Hynix Semiconductor Inc. and Micron.
Intel's annual net income topped $1 billion for the first time in 1992, following a very successful, brand-building marketing campaign. Intel ads aggressively sought to bolster consumer interest in and demand for computers that featured 'Intel Inside.' By late 1993, the company's brand equity totaled $17.8 billion--more than three times its 1992 sales. Also during this time, Intel began to branch out from chipmaking. In 1992, the company's Intel Products Group introduced network, communications, and personal conferencing products for retail sale directly to PC users.
In 1993 Intel released its fifth-generation Pentium processor, a trademarked chip capable of executing over 100 million instructions per second (MIPS) and supporting, for example, real-time video communication. The Pentium processor, with its 3.1 million transistors, was up to five times more powerful than the 33-megahertz Intel 486 DX microprocessor (and 1,500 times the speed of the 4004), but, in an unusual marketing maneuver, the company suggested that 'all but the most demanding users' would seek out PCs powered by the previous chip. The Pentium's reputation was initially sullied by the revelation of an embedded mathematical flaw, but Intel moved quickly to fix the problem.
The company enjoyed a dramatic 50 percent revenue increase in 1993, reaching $8.78 billion from $5.84 billion in 1992. Moreover, Intel's net income leapt 115 percent to $2.3 billion, repudiating Wall Street's worries that competition had squeezed profit margins. While Intel faced strong competition both from chip makers such as giant Motorola, Inc.'s PowerPC and former partner IBM, its place at the leading edge of technology was undisputed.
A key initiative that kept Intel ahead of its competitors was the company's move beyond chip design into computer design. With the advent of the Pentium, Intel began designing chipsets and motherboards--the latter being the PC circuit board that combined a microprocessor and a chipset into the basic subsystem of a PC. With the company now selling the guts of a PC, dozens of computer manufacturers began making and selling Pentium-based machines.
In the mid-1990s, as sales of PCs accelerated and multimedia and the Internet were beginning to emerge, Intel continued developing ever more powerful microprocessors. In 1995 the Pentium Pro hit the market sporting 5.5 million transistors and capable of performing up to 300 MIPS. Intel next added MMX technology to its existing line of Pentium processors. MMX consisted of a new set of instructions that was designed specifically to improve the multimedia performance of personal computers. Fueled by exploding demand, revenues hit $20.85 billion by 1996, while net income soared to $5.16 billion.
At this point Intel was continuing its longtime strategy of designing new, more powerful chips for the top end of the market while allowing previous-generation microprocessors to migrate down to the lower segments of the market. With the introduction of the Pentium II in May 1997, however, the company adopted a new strategy of developing a range of microprocessors for every segment of the computing market. The Pentium II, with 7.5 transistors, debuted with a top-end model that clocked at 300 MHZ. Originally designed for high-end desktop PCs, the Pentium II was soon adapted for use in notebook and laptop computers. With the following year came the launch of the Celeron processor, which was designed specifically for the value PC desktop sector, a rapidly growing segment of the market ever since the early 1997 debut of a sub-$1,000 PC from Compaq. Also in 1998 Intel for the first time designed a microprocessor--the Pentium II Xeon--especially for midrange and higher-end servers and workstations. At the same time Intel was moving into another burgeoning sector, that of embedded control chips for networking and other applications, such as digital set-top boxes.
Meanwhile Intel settled a dispute with Digital Equipment Corporation (DEC) over the development of the Pentium chip by acquiring DEC's semiconductor operations. In May 1997 Craig R. Barrett was named president of Intel, having joined the company in 1974, serving as head of manufacturing starting in 1985, and being named chief operating officer in 1993. Grove remained chairman and CEO for one year, whereupon Barrett was named president and CEO, with Grove retaining the chairmanship. In early 1999 Intel reached a settlement with the Federal Trade Commission on an antitrust suit, thereby avoiding the protracted litigation and negative publicity that beset its Wintel partner, Microsoft, in the late 1990s. Reflecting the increasing importance of technology to the U.S. economy, Intel was added to the Dow Jones Industrial Average in November 1999.
During the late 1990s Intel made several strategic acquisitions that rapidly gave the company a significant presence in areas outside its microprocessor core: wireless communications products, such as flash memory for mobile phones and two-way pagers; networking building blocks, such as hubs, switches, and routers; and embedded control chips for laser printers, storage media, and automotive systems. Intel also entered the market for e-commerce services, rapidly building up the largest business-to-business e-commerce site in the world, with $1 billion per month in online sales by mid-1999. The company was not neglecting its core, however; in 1999 Intel had its largest microprocessor launch ever with the simultaneous introduction of 15 Pentium III and Pentium III Xeon processors. In early 2000 a one-gigahertz Pentium III chip hit the market. Later in 2000 came the debut of the next generation processor for the early 21st century, the Itanium, the company's first 64-bit processor, which was initially designed to meet the needs of powerful Internet servers. With its continuing development of ever more powerful processors and its aggressive expansion into other key technology areas, Intel appeared certain to remain one of the linchpins of the information economy in the new millennium.
Principal Subsidiaries: Componentes Intel de Costa Rica, S.A.; DSP Communications, Inc.; Dialogic Corporation; Intel Commodities Limited (Cayman); Intel Corporation (UK) Limited; Intel Electronics Limited (Israel); Intel International BV (Netherlands); Intel Ireland Limited (Cayman); Intel Kabushiki Kaisha (Japan); Intel Massachusetts, Inc.; Intel Overseas Corporation; Intel Products (M) Sdn. Bhd. (Malaysia); Intel Puerto Rico, Inc; Intel Semiconductor Limited; Intel Technology Phils, Inc. (Philippines); Intel Technology Sdn. Berhad (Malaysia); IPivot, Inc.; Level One Communications, Inc.; Mission College Investments Limited (Cayman).
Principal Operating Units: Intel Architecture Business Group; Wireless Communications and Computing Group; Communications Products Group; Network Communications Group; New Business Group.
Principal Competitors: Acer Inc.; Advanced Micro Devices, Inc.; Atmel Corporation; Cisco Systems, Inc.; Electronic Data Systems Corporation; Exodus Communications, Inc.; Fujitsu Limited; Harris Corporation; Hitachi, Ltd.; International Business Machines Corporation; Integrated Device Technology, Inc.; Lucent Technologies Inc.; Macronix International Co., Ltd.; Microchip Technology Incorporated; Mitsubishi Electric Industrial Co., Ltd.; Motorola, Inc.; National Semiconductor Corporation; NEC Corporation; Nortel Networks Corporation; Koninklijke Philips Electronics N.V.; Samsung Electronics Co., Ltd.; Sharp Corporation; STMicroelectronics N.V.; Sun Microsystems, Inc.; Texas Instruments Incorporated; 3Com Corporation; Toshiba Corporation; Transmeta Corporation; VIA Technologies, Inc.
Market Cap (Mil.): $125,204.90
Shares Outstanding (Mil.): 5,385.16
Annual Dividend: 0.72
Yield (%): 3.12
INTC.O Industry Sector
P/E (TTM): 10.83 9.55 19.06
EPS (TTM): 96.35 -- --
ROI: 24.16 5.68 16.13
ROE: 27.00 6.09 17.80
Incorporated: 1968 as N M Electronics
Sales: $29.39 billion (1999)
Stock Exchanges: NASDAQ
Ticker Symbol: INTC
NAIC: 334413 Semiconductor and Related Device Manufacturing; 334210 Telephone Apparatus Manufacturing; 511210 Software Publishers; 541512 Computer Systems Design Services
1968: Robert Noyce and Gordon Moore incorporate N M Electronics, which is soon renamed Intel Corporation.
1970: Company develops DRAM, dynamic RAM.
1971: Intel introduces the world's first microprocessor and goes public.
1974: Company introduces the first general purpose microprocessor.
1980: IBM chooses the Intel microprocessor for the first personal computer.
1983: Revenues exceed $1 billion for the first time.
1992: Net income tops $1 billion for the first time.
1993: The fifth generation chip, the Pentium, debuts.
1996: Revenues surpass $20 billion, net income exceeds $5 billion.
1997: Company introduces the Pentium II microprocessor.
1999: Intel debuts the Pentium III and is added to the Dow Jones Industrial Average.
2000: The first Intel 1-gigahertz processor hits the market.
Name Age Since Current Position
Shaw, Jane 72 2009 Independent Chairman of the Board
Otellini, Paul 60 2005 President, Chief Executive Officer, Director
Smith, Stacy 48 2010 Chief Financial Officer, Senior Vice President
Bryant, Andy 60 2009 Chief Administrative Officer, EVP - Technology, Manufacturing and Enterprise Services
Perlmutter, David 57 2009 Executive Vice President, General Manager - Intel Architecture Group
Sodhani, Arvind 56 2007 Executive Vice President, President - Intel Capital
Melamed, Arthur 65 2009 Senior Vice President, General Counsel
Kilroy, Thomas 53 2010 Senior Vice President, General Manager - Sales and Marketing Group
Holt, William 58 2006 Senior Vice President, General Manager - Technology & Manufacturing Group
Yoffie, David 56 1989 Independent Director
Pottruck, David 62 1998 Independent Director
Hundt, Reed 63 2001 Independent Director
Barshefsky, Charlene 60 2004 Independent Director
Plummer, James 66 2005 Independent Director
Decker, Susan 48 2006 Independent Director
Donahoe, John 50 2009 Independent Director
Yeary, Frank 47 2009 Independent Director
2200 Mission College Boulevard
Santa Clara, California 95052-8119
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