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

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.

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

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.

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.

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

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

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

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.

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

The i860 StoryIn 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

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.

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.

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.