Intel Company Report

INTEL

COMPANY REPORT

BY GROUP 6.

Section F

Sharmistha.

Parumitha.

Venkataramana.

Shilpa.

Sindhura.

Jai Kartik.

Introduction

Industry Profile

The semiconductor industry is the collection of business firms engaged in the design and fabrication of semiconductor devices. The semiconductor industry lives - and dies - by a simple creed, smaller, faster and cheaper. The benefit of being tiny is pretty simple, finer lines mean more transistors can be packed onto the same chip. The more transistors on a chip, the faster it can do its work.Once semiconductors became a viable business around 1960, following the first laboratory transistors, rapid technological advances have been the keynote of this economic trend, and the industry has been one of a handful crucial to drawing the broad outlines of late 20^th-century economic history. The global semiconductor industry is dominated by Taiwan, South Korea, USA, and Japan. Despite experiencing a downfall in the semiconductor market, Japan is still major leader in the industry. The U.S. industry faces challenges to development by some forms of government regulation. The U.S. government regulates exports and certain uses of some types of semiconductors due to their potential dual use in military applications. These restrictions can inhibit worldwide growth of the industry. A few major players in this segment are Taiwan Semiconductor Manufacturing Company, United Microelectronics Corporation, INTEL, Toshiba, NEC, Sony, IBM, Samsung, Texas Instruments, ST Microelectronics, NXP, Freescale, Infineon, Advanced Micro Devices, and NVIDIA.

INTEL – the company profile

Intel Corporation was incorporated in California in 1968 and reincorporated in Delaware in 1989. It is a semiconductor chip maker, developing advanced integrated digital technology platforms for the computing and communications industries. The Company offers products at various levels of integration, allowing its customers flexibility to create advanced computing and communications systems and products. Intel's products include chips, boards and other semiconductor components that are the building blocks integral to computers, servers, and networking and communications products. Its component-level products consist of integrated circuits used to process information. Intel's products include microprocessors; chipsets; motherboards; flash memory; wired and wireless connectivity products; communications infrastructure components, including network processors; application and cellular baseband processors; and products for networked storage. Its customers include original equipment manufacturers, and original design manufacturers who make computer systems, cellular handsets and handheld computing devices, and telecommunications and networking communications equipment; PC and network communications product users including individuals, large and small businesses, and service providers who buy PC components and board-level products, as well as its networking and communications products, through distributor, reseller, retail and OEM channels throughout the world; and other manufacturers, including makers of a range of industrial and communications equipment. Most of Intel's products are sold or licensed through sales offices located near major concentrations of users, throughout the Americas, Asia-Pacific, Europe and Japan. Intellectual property rights that apply to the Company's various products and services include patents, copyrights, trade secrets, trademarks and maskwork rights.

History

Intel was founded in 1968 by Gordon E. Moore and Robert Noyce when they left Fairchild Semiconductor. A number of other Fairchild employees also went on to participate in other Silicon Valley companies. Intel's third employee was Andy Grove, who ran the company through much of the 1980s and the high-growth 1990s. Grove is now remembered as the company's key business and strategic leader. By the end of the 1990s, Intel was one of the largest and most successful businesses in the world.

Origin of the name

At its founding, Gordon Moore and Robert Noyce wanted to name their new company "Moore Noyce". The name, however, sounded remarkably similar to "more noise" — an ill-suited name for an electronics company, since noise is typically associated with bad interference. They then used the name NM Electronics for almost a year, before deciding to call their company INTegrated ELectronics or "Intel" for short. However, Intel was already trademarked by a hotel chain, so they had to buy the rights for that name at the beginning.

Company's evolution

Intel has grown through several distinct phases. At its founding, Intel was distinguished simply by its ability to make semiconductors, and its primary products were static random access memory (SRAM) chips. Intel's business grew during the 1970s as it expanded and improved its manufacturing processes and produced a wider range of products, still dominated by various memory devices.

While Intel created the first microprocessor in 1971 and one of the first microcomputers in 1972, by the early 1980s its business was dominated by dynamic random access memory chips. However, increased competition from Japanese semiconductor manufacturers had by 1983 dramatically reduced the profitability of this market, and the sudden success of the IBM personal computer convinced then-CEO Grove to shift the company's focus to microprocessors, and to change fundamental aspects of that business model. By the end of the 1980s this decision had proven successful, and Intel embarked on a 10-year period of unprecedented growth as the primary (and most profitable) hardware supplier to the PC industry.

After 2000, growth in demand for high-end microprocessors slowed and competitors garnered significant market share, initially in low-end and mid-range processors but ultimately across the product range, and Intel's dominant position was reduced. In the early 2000s then-CEO Craig Barrett attempted to diversify the company's business beyond semiconductors, but few of these activities were ultimately successful.

In 2005, CEO Paul Otellini reorganized the company to refocus its core processor and chipset business on platforms (enterprise, digital home, digital health, and mobility) which led to the hiring of over 20,000 new employees. In September of 2006 due to falling profits, the company announced a restructuring that resulted in layoffs of 10,500 employees or about 10 percent of its workforce by July of 2006. Its research lab located at Cambridge University was closed at the end of 2006.

Leadership and corporate structure

Robert Noyce was Intel's CEO at its founding in 1968, 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 CEO, and Barrett replaced Grove as Chairman of the Board. Grove stepped down as Chairman, but is retained as a special adviser. Current members of the board of directors of Intel are Craig Barrett, Charlene Barshefsky, Susan Decker, James Guzy, Reed Hundt, Paul Otellini, James Plummer, David Pottruck, Jane Shaw, John Thornton, and David Yoffie.

Products of Intel

Intel's leading-edge products range from processors to processor technologies that are designed to work together to deliver a great computing experience—for home, business, and on the go. Intel has diversified its products from Desktops, Processors, Notebooks, Motherboards, Chipsets, Server, Consumer electronics, Flash memory, work stations, embedded systems and communications, storage and I/O. Some of the products of Intel are listed below

Desktops

Ø Intel® vPro™ technology.

Ø Intel® Viiv™ technology.

Ø Processors.

Ø Boards.

Ø Chipsets.

Ø Adapters.

Notebooks

Ø

Intel® Centrino® processor technology.

Ø Intel® Centrino® with vPro™ technology.

Ø Processors.

Ø Chipsets.

Ø Adapters.

Ø Mobile Internet Device (MID).

Servers

Ø Processors.

Ø Chipsets.

Ø Systems.

Ø Boards.

Ø Adapters.

Ø Chassis.

Ø Blade servers.

Ø RAID controllers.

Ø Storage systems.

Ø Carrier grade servers.

Workstations

Ø Processors.

Ø Chipsets.

Embedded and Communications

Ø Processors.

Ø Chipsets.

Ø Wireless networking.

Ø Desktop adapters.

Ø Server adapters.

Ø Ethernet controllers.

Ø Compute boards and platforms.

Ø Optical.

Ø RFID.

Ø Microcontrollers.

Processors

Ø Desktop.

Ø Notebook.

Ø Server.

Ø Workstation.

Motherboards

Ø Desktop boards.

Ø Server boards.

Ø Workstation boards.

Chipset

Ø Desktop.

Ø Notebook.

Ø Server.

Ø Workstation.

Ø Intel Graphics.

Ø Embedded.

Ø Consumer electronics.

Consumer Electronics

Ø Media and Processing Components.

Ø Demodulators and Tuners.

Flash Memory

Ø Intel® NAND flash memory.

Software Products

• Compilers.
• VTune™ analyzers.
• Performance libraries.
• Threading tools.
• Cluster tools.

Storage and I/O

Ø Serial ATA controllers.

Ø SAS controllers.

Desktop processors for Business

Ø Intel® Core™2 processors with vPro™ technology.

Ø Intel® Centrino® Atom™ processor technology.

Ø Intel® Xeon® processor family.

Ø 45nm quad-core technology.

Intel® Core™2 Processor with vPro™ Technology:

Designed from the ground up to empower IT while meeting the needs of business, Intel® Core™2 processor with vPro™ technology provides remote manageability, unique hardware-assisted security, and energy-efficient performance so you can spend more time on strategic initiatives and less time on PC issues and downtime.

With Intel Core 2 processor with vPro technology, you get business-optimized technologies built in so you can gain productivity while lowering costs.

Ø Remote manageability providing IT with remote PC monitoring and the ability to diagnose and repair the PC even when the OS is off or unresponsive plus convenient remote configuration for over-the-wire set-up.

Ø Broad industry support from leading manageability and security independent software vendors (ISVs) like Symantec, LANDesk, HP, Microsoft, and Cisco that take advantage of the Intel Core 2 processor with vPro technology features.

Ø Industry-standard management support for protocols such as WS-MAN and DASH± that are more capable and secure than ASF and enables secure communication between the console and the PC.

Ø Reduce power bills enabled by next-generation hafnium-infused 45nm Intel® Core™ micro architecture offering reduced electrical current leakage and increased performance while the new efficient design helps PCs meet ENERGY STAR requirements.

Ø Get breakthrough performance with full 64-bit Windows Vista* and Windows Aero* graphics support without the expense of an external graphics card enabled by powerful Intel® Graphics and full support for next-generation multi-threaded software.

Delivering bold benchmarks to business

Increase security, maintain PCs more efficiently, and reduce your operating expenses with Intel's hardware-based management technologies enabling a stable and reliable IT infrastructure. The following are some of the benchmarks achieved.

Ø Achieve up to 94 percent faster time-to-patch saturation.

Ø See time to software improvements of up to 95 percent.

Ø Reduce hardware related desk-side visits by up to 56 percent.

Ø Reduce software related desk-side visits by up to 91 percent.

Ø Reduce downtime for maintenance from multiple hours to mere minutes.

Mobile PCs

Intel® Core™2 Processor with Viiv™ Technology

When you want a sensational high-definition (HD) experience, look no further than PCs with Intel® Core™2 processor with Viiv™ technology. Built on the latest hafnium-infused 45nm dual- and quad-core processors, these systems give you performance for HD audio and video and your most demanding applications.

Key components

Ø The cutting edge of every PC with an Intel Core 2 processor with Viiv technology is powered by an Intel Core 2 Duo or Intel Core 2 Quad processor to give you the performance to run demanding applications and manage your HD entertainment.

Ø PCs built from the ground up for sensational high-definition experiences. The Intel Core 2 processor with Viiv technology includes the latest Intel chipsets with most everything you need to build a multimedia PC for HD content. Experience stunning sound from movies and music with up to 7.1 surround sound capabilities enabled by Intel® High Definition Audio (Intel® HD Audio). Get full 1080P video playback for movie clips, media streams, and the latest generation of HD video cameras with optional Intel® Clear Video Technology. And explore the Internet with 1GB-capable broadband Ethernet to quickly access high-definition content.

Operating system

Microsoft Vista Home Premium* makes it easy to control and enjoy your digital media.

Features and benefits

Intel® Core™2 Duo processor

Get incredible performance from up to 6 MB of cache (a 50 percent increase), higher frequencies, and 1333 MHz FSB. Get up to 30 percent faster performance for applications like photo-editing, retouching, and publishing.

Intel® Core™2 Quad processor

Enjoy incredible quad-core performance with 12 MB of cache (a 50 percent increase), higher frequency and 1333 MHz FSB. Four processing cores and Intel's hafnium-infused circuitry delivers high-performance for multimedia applications.

Intel® HD Boost

Intel Core 2 Duo processors with Intel HD Boost give you up to 70 percent more performance when encoding high-definition memories from your HD video camera.

Intel® High Definition Audio (Intel® HD Audio)

Experience high-quality audio for stunning sound from movies and music and up to 7.1 surround sound capabilities.

Intel® G35/G33 Express Chipset with (optional) Intel® Clear Video Technology

Get full 1080P video playback for movie clips, media streams, and the latest generation of HD video cameras.

Intel® PRO Client Wired LAN

Explore the Internet with 1GB-capable broadband Ethernet to quickly access high-definition content.

Optional Intel® Matrix Storage Technology

Improved storage performance and help protect digital photos, video, and music with automated back-up and restore on systems with optional dual disk drives.

Optional surround sound speakers

Take advantage of surround sound with up to eight high-quality speakers with Intel HD Audio.

Optional TV tuner card

Watch, record, and pause live TV.

Desktop Processors

The Intel® Core™2 processor family delivers unrivalled performance and breakthrough energy efficiency and Intel's newest processors, built using 45nm technology with hafnium-infused circuitry, improve performance even further.

Features and benefits

Intel® Core™2 Extreme processor QX9770

Get untouchable desktop performance from Intel's latest Extreme processor. Play games, edit high definition video and easily tackle the most demanding multitasking environments like never before.

Intel® Core™2 Extreme processor

For extreme computing. Enjoy revolutionary levels of performance enabling vivid, high-definition experiences and multi-tasking responsiveness from state-of-the-art Intel dual-core and quad-core technologies.

Intel® Core™2 Quad processor

Multimedia enthusiasts, prepare to enthuse. Bring quad-core performance to your desktop with the Intel® Core™2 Quad processor. It's the ideal engine for highly threaded entertainment applications and highly productive multitasking.

Intel® Core™2 Duo processor

The power to perform. With power-optimized enabled dual-core technology and exceptional energy efficiency, the Intel® Core™2 Duo processor excels running the most intense applications.

Intel® Desktop Board

Featured Product

Intel® Desktop Board D5400XS

The ground-breaking Intel® Dual Socket Extreme Desktop Platform is the first dual socket desktop board from Intel.

Intel® Desktop Ethernet Adapters

Award-winning line of Ethernet, Fast Ethernet and Gigabit Ethernet desktop adapters. Choose from a variety of adapters designed to extend Gigabit Ethernet performance to the desktop, enhance desktop management and provide flexible connectivity for your legacy PCs.

Note Books

Intel® Centrino® Processor Technology

Mobile computing, your time has come. With new laptop PCs based on Intel® Centrino® processor technology for the home, or Intel® Centrino® with vPro™ technology for business, you'll experience next-generation dual-core performance, enabled longer battery life, faster wireless connectivity, and more, right at your fingertips.+ With over 2x the performance when multitasking¹ and more than 2x the performance on compute-intensive applications¹, these laptops are equipped to handle everything from robust business to hardcore gaming and everything in between. And with Intel Centrino processor technology, you'll get up to 50 percent the performance on intensive multimedia applications like HD video encoding² for the ultimate in mobile media experience, bar none.

Intel Centrino processor technology

Push the limits of mobile computing with Intel Centrino processor technology, enabling blazing performance and longer-lasting battery life, and go almost anywhere with wireless connectivity you can count on to deliver intensive hi-def multimedia, games, and more.

Intel® Centrino® with vPro™ technology

Maximize your productivity and minimize downtime with high-performance laptops with Intel Centrino with vPro technology. Designed from the ground up to cater to the needs of business, these laptops provide remote management, advanced securities features and more.

Notebook Processors

Intel® Core™ processor family delivers advanced mobile performance and is built for energy-efficient power savings.

Feature Products

Intel® Core™2 Extreme mobile processor

Experience the world's highest performing mobile processor¹. Enjoy revolutionary levels of performance enabling vivid, high-definition experiences and multi-tasking responsiveness from state-of-the-art Intel dual-core technologies.

Intel® Core™2 Duo mobile processor

Based on Intel's revolutionary Intel® Core™ micro architecture. Experience new levels of system responsiveness when running multiple applications and smarter battery performance designed to help extend mobility.

Intel® Core™ Duo mobile processor

Intel's first mobile dual-core processor executes multiple threads simultaneously using two cores, thereby helping to maximize performance and multitasking capabilities.

Intel® Core™2 Solo mobile processor

The Intel Core 2 Solo processor is the next generation single-core mobile processor that provides freedom and flexibility to live, work, and play on-the-go.

Intel® Core™ Solo mobile processor

The Intel Core Solo processor is a single-core mobile processor that provides freedom and flexibility to live, work, and play on-the-go.

Notebook Chipsets

Get enhanced capabilities for audio, digital video and communications with Intel® chipset technologies for notebooks.

Intel® PRO/Wireless Network Connection

Intel® PRO/Wireless 3945ABG Network Connection (Tri-mode 802.11a/b/g)
Intel® PRO/Wireless 2915ABG Network Connection (Tri-mode 802.11a/b/g)
Intel® PRO/Wireless 2200BG Network Connection (Dual mode 802.11b/g)

The Intel® PRO/Wireless Network Connection is the integrated Wireless LAN (WLAN) solution for Intel® Centrino® processor technology and desktop personal computers. The Intel PRO/Wireless Network Connection provides freedom and flexibility to work and play without hunting for a phone jack, network cable, or plugging in a special card. Get connected through wireless LAN networks in your home, in the office, and in wireless LAN hotspots in airports, hotels and coffee shops.

Mobile Internet Devices (MIDs)

If you are looking for an Internet experience in your pocket, look for a Mobile Internet Device powered by the revolutionary Intel® Centrino® Atom™ processor technology. With incredible mobile performance, wireless connectivity and long battery life, your new Mobile Internet Device will allow you to connect, entertain, stay informed, and be productive wherever you go.

Product information

Intel® Centrino® Atom™ processor technology overview

Description: Enabling a new generation of Mobile Internet Devices. Mobile Internet Devices represent a new category of small, truly mobile devices that give you an amazing Internet experience -- allowing you to communicate with others, enjoy your favorite entertainment, and access information on-the-go. Consumer electronics and PC companies are using Intel Centrino Atom processor technology to deliver exciting new products for consumers and business users. This latest generation of small, powerful, highly portable Internet-connected devices combines many great capabilities with the convenience of a pocket-sized solution for your life on-the-go. With Intel Centrino Atom processor technology fueling the Mobile Internet Device revolution, your access to great Internet experiences will never be the same. As devices get smaller, sleeker, and lighter than ever, you'll be able to choose from a variety of exciting new devices and meet the demanding needs of your highly mobile lifestyle.

The possibilities are endless, designed to be small while delivering the full power next-generation MIDs demand, Intel Centrino Atom processor technology enables more of everything you.

Ø Surf the full Internet on a device that fits in your pocket .

Ø Keep-in-touch on instant messenger (IM) or VOIP

Ø Enjoy outstanding performance for high-definition (HD) video and audio

Ø Remain unwired with long battery life keeping you entertained and productive between charges¹

Ø Connect where and when you want with built-in wireless-around town and around the world¹

Ø Experience broadband on-the-go for wireless access beyond hot spots with select WiMAX ready MIDs.

Ø Get turn-by-turn directions and personalized information based on your location, like the nearest restaurants, homes for sale, and more with select GPS.

Server Processors

Build a scalable, flexible infrastructure to grow and change with your business. Intel® architecture powers a range of 64-bit servers¹, so you can optimize your computing environment for your unique business requirements.

Multi-core Intel® server processors offer breakthrough performance and energy efficiency for implementations of all sizes.

Intel® Xeon® processor 7000 sequence: Large-scale enterprise computing & server consolidation

Ø Enterprise databases, ERP, CRM, decision support.

Ø Scales up to 32 dual-core processors per server.

Ø Large 16MB cache for very high throughput.

Intel Xeon processor 5000 sequence: Intel's most widely deployed server processor

Ø E-mail, database, and web servers, high-performance computing.

Ø Quad-core leading-edge performance or robust dual-core option scales out with two processors per server.

Ø High-density, low-power options are available.

Intel Xeon processor 3000 sequence: Economical servers for small business & clusters

Ø Mail, file/print services

Ø Quad-core advanced performance or dual-core mainstream processor scales out with one processor per server

Ø High-density entry-level configurations and HPC

Intel® Itanium® processor 9000 sequence: Massive, mission-critical computing & RISC replacement

Ø Large-scale databases, data warehouses, ERP, business intelligence, and data analytics

Ø Scales up to 512 dual-core processors and an incredible 1000TB (1 Petabyte) RAM.

Ø Ultimate scalable performance, flexibility, and reliability.

Intel® Server Systems

From component selection to the latest in system architecture, Intel® Server Systems are designed to provide you with uninterrupted service—and help you meet all your Business needs.

Featured product

Intel® Server Systems SR1560SF and SR1560SFHS

A flexible and serviceable 1U rack-optimized platform for high performance and high density compute environments.

Intel® Communications Rack Mount Servers

Intel® Communications Rack Mount Servers provide ruggedized design and long life in shallow depth 1U and 2U form factors, suitable for telco and data network applications. They include the following two product families:

Intel® Carrier Grade Servers are NEBS-3 and ETSI compliant standard building blocks used in a variety of telecom applications and are important for satisfying the demanding requirements and limited space of the telecom central office.

Intel® IP Network Servers are optimized for high I/O throughput and compute performance, serving as an excellent choice for data network applications with large I/O requirements. They are well suited for enterprise application acceleration and content caching, and are ideal platforms for running Telco SoIP, including IMS, IPTV, video on demand (VoD), SIP application servers, IP-PBX, and IP-PSTN gateways.

Intel® Server and Workstation Boards

Intel® Server Boards are designed with cutting edge leadership technologies providing you and your customers an exceptional degree of reliability, availability and serviceability.

Featured product

Intel® Server Board S5400SF

A rack-optimized, highly integrated server board designed for high performance computing and high-density data centers.

Intel® Server Ethernet Adapters

Intel® Server Ethernet adapters are compatibility tested, and come in a broad range from 10/100 Mbps to 10 Gbps, for copper or fiber, from PCI to PCI Express*, in single- to quad-port configurations. New features include improved installation and management with Intel® PROSet Utility for Microsoft Device Manager* and other tools.

Intel® Server Chassis

Intel® Server Chassis are designed and validated for easy, cost-effective integration with Intel® Server Boards. A full line-up of pedestal and rack-optimized chassis are available to meet your customers' diverse needs.

Featured Product

Intel® Server Chassis SC5400

A full featured chassis designed for high performance I/O, large capacity storage and ease of service for medium to large business.

Intel® Blade Servers

Through proven leadership in computing, networking, and technological innovation, the Intel® Blade Server System has become the system of choice for the mainstream server market. Intel® blade servers squarely address daunting business challenges and make it possible to achieve greater productivity. Learn how blades can simplify management and provisioning while delivering exceptional reliability and availability.

Featured Product

Intel® Blade Server Ethernet Switch Modules SBCEGBESW1 and SBCEGBESW10

Intel® Blade Server Ethernet Switch Modules directly integrate with the blade server chassis, dramatically improving manageability and cost of ownership, to meet the networking I/O requirements of small-to-medium and large data center customers.

Intel® Server Compute Blade SBXD132

Intel® Compute Blade SBXD132, Increased Performance Per Watt, Deployment Flexibility, Simplified Management.

Key Features

Intel® Blade Server Chassis SBCE

The Intel® Blade Server Chassis is an example of state-of-the-art blade engineering that allows you to greatly expand computing power while reducing management resources.

Intel Server Compute Blade SBXD132

The Intel® Server Compute Blade SBXD132 provides dual-core dual processor performance, for memory and I/O intensive applications.

Intel® Server Compute Blade SBX82

The Intel® Server Compute Blade SBX82 is powered by the Intel® Xeon® processor with 800 MHz system bus for greater performance, memory addressability, and I/O bandwidth.

Intel® Optical Pass-Thru Module

Deploying an Intel® Optical Pass-thru Module in the blade chassis enhances your flexibility to connect to existing external Fibre Channel SAN switch or Fiber-optic Gigabit Ethernet switch infrastructures.

Intel® Blade Server Ethernet Switch Modules

The Intel® Blade Server Ethernet Expansion Card adds two more ethernet channels to each Intel Server Compute Blade. Dramatically reduce cabling and add network bandwidth and redundancy with the Intel® Blade Server Ethernet Solution.

Brocade* 4GB Fibre Channel Switch Module

The Intel® Blade Server Fibre Channel Expansion Card SBFCM with 4-Gb Fibre Channel Host Bus Adapter connects directly with the Intel® Blade Server Fibre Channel Switch Module, eliminating as many as 28 cables from a single Intel Blade Server Chassis.

Intel® RAID Controllers

Intel offers three categories of RAID products to protect data, increase performance, and enhance server availability:

1. Intel® RAID Controllers are add-in cards designed to provide a wide variety of RAID solutions for Intel® Server boards and Systems.

2. Intel® Integrated Server RAID signifies unique system boards that are designed to add value above that of a standard RAID adapter card to Intel® Server Boards and Systems.

3. Intel® Embedded Server RAID Technology is host-based RAID that utilizes the chipset, processors, and memory of the server board to provide basic data protection.

4. Intel® RAID is powered by LSI MegaRAID* technology.

Featured Product

Intel® RAID Controller SRCSASPH16I

A high port-count RAID for direct connection of up to 16 SAS or SATA.

Intel® Storage Systems

Take control of spiraling data storage volumes in your home or business with Intel® Storage Systems. Get robust, flexible and scalable solutions with storage area network (SAN), network-attached storage (NAS), and direct-attached storage (DAS) configurations.

Featured product

Intel® Entry System SS4200-E

Manage your digital life with the Intel® Entry Storage System SS4200-E, with software by EMC*. This powerful, affordable and easy-to-use system keeps all your digital stuff neatly and securely on one device.

Product Life Cycle

Introduction

The product life cycle concept suggests that a product passes through four stages of evolution. Introduction, growth, maturity and decline. As a product evolves and passes through theses four stages profit is affected and different strategies have to be employed to ensure that the product is a success within its market.

As a new product much time will be spent by the organisation to create awareness of it presence amongst its target market. Profits are negative or low because of this reason.

Growth

If consumer clearly feels that this product will benefit them in some ways and they accept it, the organisation will see a period of rapid sales growth.

Maturity

Rapid sales growth cannot last forever. Sales slow down as the product sales reach peak as it has been accepted by most buyers.

Decline

Sales and profits start to decline, the organisation may try to change their pricing strategy to stimulate growth, and however the product will either have to be re-modified, or replaced within the market.

Intel Product Life Cycle

Intel was a leader in the DRAM market when it first started. The year was 1971 when Intel introduced the 1103, a dynamic random access memory chip. The 1103 quickly became the best selling semiconductor product accounting for the majority of Intel's revenue. With this emerging market of DRAMS came much anticipated competition. As with any groundbreaking product, the 1103 required a lot of R&D, complex engineering, and new manufacturing equipment and practices. Any company that comes out with a product first in a particular area has advantages over other companies. Such as the customer base in that segment goes solely to the developer of that item. Branding also starts at the stage of introduction. Branding is getting name recognition correlated with Intel's new product base. There are many disadvantages with creating a new product also.

Once the product is introduced, the competition now has a chance at this market. This is true because the product is available for purchase and is no longer confidential. Designing new technology is very costly, and many companies choose to enter a market that has been pre-developed because of the high cost associated with R%D and engineering. Many companies reverse engineer a product to get information on how to design another that will outsell and outperform the previous ones. As it stated in the case study, "…DRAM prices for any given generation device would fall dramatically once competitive capacity came on line". The fact that prices fall and performance increases once a product has time on the market is also illustrated on several exhibit graphs. They basically display the curve that represents various chips and how time effects various aspects of the product. Obviously the price drops once competition is active. Through these tough times of introduction, Intel maintained as a market leader across four different generations of DRAMS. With the lead that Intel held, the company was able to produce technology above the competitors and also offer them for a lower price in the market. As time progressed, Intel gradually began losing market share, mainly to foreign companies. Many reasons for this exist.

For example, the Japanese company Fujitsu began taking away Intel's market share, by investing heavily in manufacturing and always replacing outdated machinery. With the increased market share that foreign companies were gaining, higher volumes were needed to keep up with demand. This increased volume gave Fujitsu (and Hitachi) a manufacturing cost advantage over the rest of the competition. Foreign companies also had the advantage of photolithography, which was unavailable to the United States at that time. These companies were also better at "ramping up" production capacity. Product ramp up is a very important step in the process of the product life cycle.

It allows a company to have their product known to the public sector, estimate the amount of inventory necessary to meet possible demand and it helps a company find their competitors in this new market. All of these examples were reasons for Intel's lost market share. Intel did make some mistakes during these times. However, sometimes there is little a company can do to halt competition in a highly demanded emerging market. Intel could have studied competing companies. By doing this, Intel would be able to produce a more competitive second-generation chip (or any other generation chip for that matter). Intel also stayed in the memory business too long. By the time the end came, only one out of eight plants were producing memories, accounting for only 5% of Intel's revenue. This is also a good sign to move to a different product base.

Functions of management play a major role in any company's success or failure. Management is responsible for guidance in many areas within any company. With regards to Intel, planning, organizing, staffing, directing, and controlling are areas that challenged management. Not only must Intel show control through all of these stages, but it must also make sure each of these areas combines into one overall process for the production of products.

Planning determines what to do and how to do it. This stage comes way before the product is actually made. It is in the pre-product life cycle of the product. Planning recognizes opportunities and how to exploit them. For example, Intel recognized the need for processing chips. After this is accomplished, then other steps follow. Planning also enables Intel to analyze scenarios and situations that may arise. From this decisions can be made. Of course with a computer-based industry, planning will most likely be short range because of rapidly changing technology. The same is true with products that were developed by Hewlett Packard. As we discovered, HP also produced a product for an emerging market. The pre-product life cycle is important here because it allows the company to determine if this plan is a good idea through cost analysis, market share availability, and accessibility to raw materials, etc…. Planning accomplishes the means necessary to develop plans of production, analyze if production will be cost efficient, and also develops and overall game plan of what needs to be done to ensure success.

Organizing is another important step in the process of developing and producing a product. This step develops objectives that will assist in meeting goals and objectives. In this stage, managers will delegate authority to appropriate employees. Without organization, the previous stage of planning will be useless and chaotic. Also, planning is not a one-stage step. This process should be implemented through the entire process as a means to get to the end.

Staffing directly relates to placing employees into the proper areas where they will be most beneficial. At this stage, manpower is assessed. The requirements for the job are recognized, and people who are capable of fulfilling them are then placed into the position. Staffing is closely tied with human resources (recruiting "fresh blood") which will later provide the talent necessary for completion of future projects. Training and development of employees are beneficial to Intel and their workers because of one underlying reason. A worker becomes more valuable when he knows or learns more. The worker becomes more like a manager than anything (illustrated by self-directing, allocating time necessary for completing tasks, and also higher level of prestige for the position that they hold).

Directing in terms of Intel relates to motivation and guidance of workers. This is where experienced managers are most valuable. Effective techniques of how to treat workers, how to display what is expected from the workers, and how the worker's job relates to the overall process are areas that are addressed at this stage. How each job relates to the final product is one of the most important subsets of directing. Without this in mind, the worker loses the view of his role in the entire cycle.

With the Intel example, control is a big issue. Control is the path to which all of the previous planning will be executed. Control includes guidelines to follow to the predetermined plan of action. This step is basically described as getting workers to do what they need to do. When a problem arises in the process at Intel, they need to take corrective measures to solve it. This is important because time is everything, and with this growing industry, there is little time to waste. To have control there must be some sort of plan. Records of production performance in past projects can follow control. In basic terms, the simpler the better. Cut out any forms that may be unnecessary. This may eliminate repetitive actions or steps that are not needed. Feedback is definitely needed to take any corrective measures at all. This step must be taken very carefully because it is a very sensitive area. Intel has to make the employee feel non-threatened and a part of the team. Alienation can not occur because this only delays the process to a longer time. Control is not controlling the workers, but it is more like working with each other to achieve a common goal (in this case it is a semiconductor product).

When speaking in regards to the product life cycle, many things contribute to the final product. What is unique about this cycle is that after each stage, the output of one area, is the input of another area. For example, manufacturing can not produce the product until it has been engineered. With this in mind, engineering must logically come before manufacturing. The same is true with the relationship between manufacturing and the user. It is obvious that it would be impossible for the user to use the product if it has not yet been built. This process may seem very obvious, and it is. When a product is in the process of being built, there are many stages that product must go through. This basic process of assembly is referred to as the product life cycle. When Intel designed the 386, many different aspects were considered. The first most likely dealt with a screening process. Would there even be a market if we were to make this unit? Are there enough raw materials and equipment to manufacture this product? Will the process bring back a considerable amount of return on investment? Questions like these were considered before the engineers even began this project. Once everything was determined to be feasible for design, product development begins. This is where Intel's engineers begin working on the design and features that the 386 will have. This step can also be assimilated with the case study video of BMW. Here BMW designed a performance sports car from scratch. When it was done, the 840ci was a competitive product and very innovative in the market that it was placed in. Once the engineers have done their duties, manufacturing will get the plans. Coinciding with manufacturing will be the discovery of the market that will purchase this product. In this case, it turned out to be Compaq, not IBM. IBM felt that the 386 did not have enough of their components to sell it. At first this startled Intel, but soon after a start-up company entitle "Compaq" took the deal. It was immediately a big success with consumers. This was good for Compaq who sold the finished product, and it was also good for Intel who manufactured what was inside the computer. When a product crosses the line of manufacturing to selling, a short-run monopoly is evident. The reason for this is because there is no other company with this same product. Intel and Compaq would both benefit from this emerging market for this Deskpro 386. Once other companies come into the mix with the 386, a little competitive turbulence will begin. Intel will most likely be in the clear seeing that these competing companies (later found out to be IBM and Compaq) would battle, not Intel. The reason for this is Intel makes what is inside, whereas IBM and Compaq sell the finished product. Intel was in a good position because it was in a win-win situation. The user is the last stage of the product life cycle. They consumer uses this product until something better comes out or the product no longer functions fo r it's intended uses.

Engineering designs what manufacturing builds. Without the combination of both of these in a company, a product will not exist. This has always been an important fact when determining what area is more important. Intel is a company that has a very strong need for both of these departments. As is true with any company dealing with constantly changing technology, Intel has to stay on the edge of new product development. Without constant emphasis on technology, Intel would immediately become surpassed by the competition.

Engineering basically at Intel is a very important department that directly ties in with the product life cycle. After the product has been distributed, it is up to the user to decide if it will succeed or fail. This can be compared to Frito Lay's introduction of the hand help computer. Never before had this company used a tool with this offered convenience. It was useful for the job that Frito Lay needed it for, and it was a durable storage device able to withstand a three-foot drop onto concrete. This displays the engineering that was involved with this product.

Once there is a product that will outperform another or is cheaper and does the same job, the price of the original product usually declines there after (as is illustrated in Exhibit 10). This graph displays the relation of cost per bit compared to a ten year span. On this graph several DRAMs are showed as having relatively short lives after the introduction of a new processor. The reason that this graph is significant is because it is directly related to Engineering and Manufacturing. With the constant stress to always come out with something better, faster, and cheaper, Engineering must constantly pay attention to opportunities that may be available. Once Engineering is done with the design phase, manufacturing makes the plans according to the specifications. When a product is successful, an extra load is put on the manufacturing because of the increase in demand. For this reason, it is very hard to define which department is more important. Engineering seems to need a little more than manufacturing because without solid innovative plans for a product, manufacturing would have little to build. If I had to rate the balance between these two departments on a percentage scale, I would give Engineering 55% and manufacturing 45%. Manufacturing needs a lot because they are also in need of new machinery and need to keep costs down. However, Engineering is the idea-generating department that requires a lot of resources.

The next years for Intel will be very interesting to say the least. It is very hard to predict what will happen in such a dynamic market. At the current time Intel is on top of their market. In the near future, there is a lot of growth that can occur from all of the technology that has been surfacing. What makes Intel a remarkable company is that they change their product base to suit the desire of the customer. This is a very important characteristic in successful companies of today.

Packaging

Packaging, containment and packing prior to sale with the primary purpose of facilitating the purchase and use of a product. Before 1800 packaging was restricted almost entirely to containment for shipping, with minimum levels of protection and preservation. Grocery bags, for example, were known in the 17th century; however it was not until the 19th century that practical bag-making machinery was developed. That century saw the emergence of metal cans (1810), setup boxes (1844), folding cartons (1879), and the Owens bottle machine (1899). Early in the 20th cent., marketing-oriented packaging began to evolve and branding, quality, storage and handling, and point-of-sale display became important attributes. By the end of World War II, packaging had become a major medium of advertising and marketing. In recent years, consumer advocates have argued that packages should contain more information on nutrition, unit costs, and contents.

The Fair Packaging and Labeling Act of 1966 gave the Food and Drug Administration authority to determine that packages are labeled accurately; the 1990 Nutrition Labeling Act required packages to contain more nutritional information, forcing companies to relabel about 75% of all goods carried by supermarkets. Environmental concerns have led to the passage of state and local laws requiring that some types of packages (notably bottles and cans) be recycled. Manufacturers are attempting to allay further regulation by developing and using packages that cause less damage to the environment.

Overview of Intel Packaging Technology

As semiconductor devices become significantly more complex, electronics designers are challenged to fully harness their computing power. Transistor count in products is expected to exceed 100 million. With a greater number of functions integrated on a die or chip of silicon, manufacturers and users face new and increasingly challenging electrical interconnect issues. To tap the power of the die efficiently, each level of electrical interconnect from the die to the functional hardware or equipment must also keep pace with these revolutionary devices. Package design has a major impact on device performance and functionality.

Today, submicron feature size at the die level is driving package feature size down to the design-rule level of the early silicon transistors. At the same time, electronic equipment designers are shrinking their products, increasing complexity, setting higher expectations for performance, and focusing strongly on reducing cost. To meet these demands, package technology must deliver higher lead counts, reduced pitch, reduced footprint area, provide overall volume reduction, aid in system partitioning, and be cost effective.

Circuit performance is only as good as the weakest link. Therefore, a significant challenge for packaging is to insure it does not gate device performance. While packaging cannot add to the theoretical performance of the device design, it can have adverse effects if not optimized. Package performance, therefore, is the best compromise of electrical, thermal, and mechanical attributes, as well as the form factor or physical outline, to meet product specific applications, reliability and cost objectives.

The continuing demand for higher performance products is requiring levels of package performance unattainable by the molded plastic and ceramic packages of the past decade. These factors have driven a variety of major innovations in Intel packaging. Intel had in past years introduced organic packaging with copper interconnects for improved electrical characteristics. Intel has recently introduced flip chip between die and package as an interconnect approach to further improve performance and offer very compact packaging. This has resulted in new classes of technology using organic substrates for both surface mount (Organic Land Grid Array - OLGA) and thru-hole (Flip Chip Pin Grid Array - FCPGA). The microPGA (µPGA) was introduced to combine flip chip interconnect with a very small form factor and socketability for compact and portable systems. While these packages differ in form factor, all can provide the required electrical and/or thermal performance needed by our advanced products.

Chip scale packaging for memory applications has also been a focus of packaging innovations, with new CSP form factors including stacked die packaging. Portability is expected to continue as a strong driver of new packaging approaches. Fit, form, and function tend to be market specific. Certain Intel devices serve more than one market need but may require different package attributes. Therefore, "one size fits all" is not a practical approach to device packaging. Packaging technology is not a single technology, but instead consists of more than 20 industry proven combinations of core technologies or core technology sets that can be categorized by package families. In support of the growing number of Intel devices and to meet the industry demand for package-specific applications, Intel’s package portfolio has more than doubled during the past ten years.

Package Types

1. Ceramic Packages

2. Leadless Chip Carrier Packages

3. Glass-Sealed Packages

4. Modules

5. Plastic Packages – Surface Mount.

6. Plastic Packages – Insertion Mount/Socket Mount

7. S.E.C. Cartridge (242 Contact)

Marketing Environment

Political Factors

Intel being a multinational company, it has to operate according to different government policies of different countries depending on the stability of the countries. Politics has a serious impact on the economic environment of the country. Political ideology and political stability or instability strongly influence the pace and direction of the economic growth. Politics can consist government stability, political values and beliefs shaping policies. Therefore, the politics of a country affect the investment decision of organizations in this country strongly.

Monopolies Legislation: Intel used its monopoly power to cement its dominance over the microprocessor market. Intel’s great contributions to the global economic growth have been encouraged and protected by patents in the design and manufacturing processes for its semiconductor products. Intel used its monopoly position in the market for microprocessors to prevent other firms from enforcing their own patents; other firms will have little incentive to invent new features to challenge Intel’s dominance. As a monopolist, Intel used its monopoly power by preventing other firms from challenging its dominance. Intel has acted illegally in many countries like Japan, Germany and United States where it used its monopoly power to impede innovation and stifle competition.

Environmental Protection: Intel shares environmental best practices and participates with governments and other companies to create a more sustainable world, taking a leadership position in developing comprehensive long-term strategies to address climate change, resource conservation, and product ecology. They strive to comply with all applicable regulatory requirements as a minimum and implement programs and processes to achieve greater protection, where appropriate. Intel seeks a healthful and safe workplace, free of occupational injury and illness. They strive to conserve natural resources and reduce the environmental burden of waste generation and emissions to the air, water, and land. Intel expects its suppliers to comply with applicable laws concerning occupational health, safety and environmental protection, to strive for a workplace free of occupational injuries and illnesses, and to engage in manufacturing that minimizes impact to the environment and the community.

Intel believes that climate change is a serious economic, social and environmental challenge that warrants an equally serious societal and policy response. Reflecting this belief, Intel has taken significant actions to reduce its own “climate footprint” through reductions in our PFC emissions, improvements in the energy efficiency of our facilities, and producing significantly more energy efficient new products.

Intel has implemented a dedicated capital funding program that allocates funds solely for the purpose of conservation and efficiency projects. This program preserves the importance of these improvements and limits funds from being re-allocated for other purposes. Many energy-efficiency and conservation improvements have been implemented across Intel, including additional efficient lighting; smart system controls; boiler efficiency; chilled water improvements; clean room heating, ventilation, and air-conditioning improvements; and improved operating processes and procedures. Since 2001, they have approved more than 200 improvement projects and saved over 400 million kWh of electricity. That’s enough energy to power more than 40,000 American homes or reduce air pollution from electricity generation equivalent to removing 50,000 automobiles from the road. Additional savings have been gained in efficiencies in natural gas and water conservation projects. Projects implemented as part of their capital funding program reduced usage by nearly 200 million gallons of water and 6 million therms of natural gas in 2006.

Intel’s recent highlight in operational energy savings includes implementation of an intensive heat recovery system in many of our wafer fabrication facilities. This technique uses waste heat from chillers to preheat air in our manufacturing clean rooms, and can reduce natural gas consumption and corresponding carbon dioxide (CO2) emissions by 30% or more.

Government Policies: Government policies play a major role in the company’s expansion plans and the company’s policies. The big change in the history of mankind event took place in the past decade. Countries like India, China, Russia and other eastern European countries pulled into the world's free economic system. Intel has been increasing white-collar or engineering jobs offshore as well. Intel works with local and national legislators around the world on a variety of corporate responsibility issues. Intel representatives attended the Belgian European Union Presidency Conference on CSR and shared ideas during meetings with European Commissioners for Enterprise and Information Society as well as Employment and Social Affairs. Intel also work with government officials on other important policy issues, including broadband deployment, privacy and cyber-security, education, benefits and workforce development, trade issues, digital rights management, and energy and environmental policy.

Intel has always emphasised on things like education, another significant area is research and development (R&D) investment that is government funded. R&D creates the ideas for future products and services. Intel always believes that R&D goes hand-in-hand with education. The third aspect would be communications infrastructure, which is really the ability to move ideas and knowledge around and to make decisions rapidly. And fourth would be the government's policy agenda.

Intel was eagerly awaiting the Indian Government's incentive package under the Semiconductor Policy and they had extensive discussion with the Government on the issue. The delay made by the Government in announcing the semi-conductor policy costed the country an Intel manufacturing and assembling plant. Intel had to move to China and Vietnam as these countries were those governments was clear with their policies. Intel is in discussions with the Indian Government for allocation of spectrum for Wi-Max services (Internet wireless broadband), a cheap and easily deployable service.

Legal Factors: Nevertheless, with globalization, the rules of competition, trade mark rights and patents, WTO rules and implications, price controls and product quality laws and a number of other legal issues in individual countries have become important and therefore they need to be included while understanding the general environment (Reimer, 2007). Recently the European Union formally lodged antitrust charges against Intel, accusing the CPU maker of using illegal methods to compete against its main rival AMD. This action represents the culmination of years of antitrust investigation by the EU—and is likely the beginning of a very unpleasant experience for Intel. EU charges that Intel used illegal methods to coerce OEM computer manufacturers to ship systems with Intel rather than AMD processors. Intel is a large firm and being accused of anti-competitive behaviour by the EU will affect its reputation in a big way, and to prove its conduct had been legal it will have to incur hefty costs.

Economical Factors

Economic factors throw light on the nature and direction of the economy in which firm operates. The firms must focus on economic trends in segments that affect their industry. The economic factors can also be divided into some categories like GNP trends, money supply, inflation rate, unemployment. Today, the digital economy is directing the information industry developing towards 3C convergence, i.e., the convergence of computing, communications and consumer electronics. As a world-leading company in information industry, Intel is committed to integrating all resources to drive the development of complete technology platforms based on Intel ingredient components. The economic conditions have fueled the competition because consumers had become price sensitive and were wary of how much value they were getting. In the current market scenario driving the market is price to performance, not just performance. Intel operates in intensely competitive industries that are characterized by a high percentage of costs that are fixed or difficult to reduce in the short term and product demand that is highly variable and difficult to forecast. Additionally, Intel is in the process of transitioning to its next generation of products on 45nm process technology, and there could be execution issues associated with these changes, including product defects and errata along with lower than anticipated manufacturing yields. Revenue and the gross margin percentage are affected by the timing of new Intel product introductions and the demand for and market acceptance of Intel's products; actions taken by Intel's competitors, including product offerings and introductions, marketing programs and pricing pressures and Intel's response to such actions; Intel's ability to respond quickly to technological developments and to incorporate new features into its products; and the availability of sufficient supply of components from suppliers to meet demand.

The recent downturn in the economy has been the toughest business cycle for Intel and the industry in general has ever faced. Despite this difficult economic environment, Intel was able to achieve many their global citizenship goals. For example; Intel reduced environmental emissions and improved their already world-class health and safety performance.

Socio-cultural Factors

Social values like demographic factors such as population, age distribution, literacy levels, inter-state migration, rural-urban mobility or cultural factors like social attitudes, customs, beliefs, rituals influence business practices in a major ways. One of the main reasons for a company’s investment decision is the workforce of this country. Some of the countries that Intel has made investments like China, Vietnam and India have young and plentiful supply of workforce. Intel is not typical of its Silicon Valley counterparts. Its culture is not as relaxed and informal as companies such as Google or Sun Microsystems. It has a fairly strict meritocracy that rewards work generously and does not keep underrated employees around for very long. No one has an office; everyone, even Otellini, sits in a cubicle. This is designed to promote egalitarianism among employees, but some new hires have difficulty adjusting to this change. Outside of California, the company has facilities in China, Costa Rica, Malaysia, Israel, Ireland, India, Philippines, and Russia internationally.

Intel has a Diversity Initiative, including employee diversity groups as well as supplier diversity programs. Like many companies with employee diversity groups, they include groups based on race and nationality as well as sexual identity and religion. In 1994, Intel sanctioned one of the earliest corporate Gay, Lesbian, Bisexual, and Transgender employee groups, and supports a Muslim employees group, a Jewish employees group, and a Bible-based Christian group.

Technological Factors

Intel leads the way in cutting-edge research and technology. Technological factors represent major opportunities and threats which must be taken into account while formulating strategies. Technological breakthroughs can dramatically influence the organization’s products, services markets, suppliers, distributors, competitors, customers, manufacturing processes, marketing practices and competitive position. Technological advancements can open up new markets, change the relative position of an industry and render existing products and services obsolete. Technological changes can reduce or eliminate cost barriers between businesses, create shorter production runs, create shortages in technical skills and result in changing values and expectations of customers and employees. This is especially important for an IT company such as Intel as it can be the key for the companies to survive or the reason which made the failure of some IT companies. There are more and more consumers in the wireless industry, nobody can argue that the PDA and cell phones have become so popular; they are the new digital trends of this era. Intel cannot ignore this profitable industry. So it has researched and announced the new chip “Atom” for mobile devices which is believed to “unleash new innovation across the industry. Taking giant leaps forward at the silicon level, Intel is developing small, fast, and energy-efficient technologies to help create the next revolutionary step in mobile, desktop, and data center computing—as well as technologies that power the engine of change for our entire industry.

Porter Five Forces Analysis

The Five Competitive Forces analysis was developed by Michael E. Porter of Harvard Business School in 1979. Since that time, Porter’s five forces analysis become an important tool for organizing the company structure in the business strategic. Porter’s five forces are based on the insight of corporate strategy that should bring the opportunities and threats back to the organizations external environment. Especially, competitive strategy should rely on and understanding of company structures and the way they change. In every company or every market, Porter has been identified five competitive forces. These forces determine the intensity of competition, hence the profitability and attractiveness of a company. Porter’s five forces support analysis of the driving forces in a company.

The original competitive forces model identified five forces which would impact on an organization’s behaviors in a competitive market. These include the following:

Ø The intensity of competitive rivalry.

Ø The bargaining power of buyers.

Ø The bargaining power of suppliers.

Ø The threat of the entry of new competitors.

Ø The threat of substitute products.

Understanding the property of each of these forces gives organizations the necessary insights to enable them to formulate the appropriate strategies to be successful in their market.

1. The intensity of competitive rivalry: Rivalry is the fierce competition among firms in an industry to gain a greater market share. In addition, the demands of customers are many. Therefore, all of the suppliers try to perform as well as they can to satisfy their customer’s demand. Changing price, improving product differentiation and creatively using channels of distribution are one of many ways which the suppliers use to customize their customers. In case of Intel, one of its biggest rivals is AMD. The intensity of rivalry between these chip making giants is very high. In 2003 AMD managed to launch an attack on its rival with the introduction of its 64-bit Opteron processors. Opteron ran 64-bit applications and legacy 32-bit applications without the drag on performance noted in Intel's Itanium processors. AMD upped the ante further in 2005 with the introduction of its first dual-core Opteron processors that doubled the performance of single-core Opterons. But Intel also matched AMD on the product side, introducing a dual-core Xeon processor in 2005, and regained the upper hand on AMD with its first quad-core Xeon in early 2007. On the developing momentum, sometimes Intel had tried to jump into another market but only to find more strong competitors and it’s a very uncomfortable barrier for Intel to get over. The organization had to abandon plans to produce cameras because it would have meant competing with two PC partners and giants - Dell and Hewlett Packard.

2. The bargaining power of buyers: Buyers with weak bargaining power are favorable in the outputs market, a firm needs to satisfy the customers so that they can sell more products. If the price of the product is too high compared to its substitute products then it won’t take long for the customers to switch. Moreover, the quality of items is one of standards which customers notice when they choose the product. In the past, there was nearly only Intel in the processor market, so the buyers simply had no choice and almost no bargaining power. Until, AMD’s Althon made a serious challenge to Intel’s Pentium. Therefore the power of buyers has increased compared to the past but still Intel is quite reputed and considered to be the best in the market so it won’t be that easy for customers to switch. But in other market like communication, many potential customers have already committed to using rival Third Generation products and won’t consider Intel’s new WiMax technology that enables high-speed Internet access over a range of around 30 miles. That’ll be a big loss for Intel and all they can do now is trying to prove and hope for favorable decisions from those yet to decide (Emerald, 2004).

3. The bargaining power of suppliers: Suppliers with low bargaining power are good for business. Suppliers have power over the firm because they control inputs of the firm. They may accept or refuse to provide materials, components or service. In case of Intel, making a silicon chip is a very complicated process and it depends on thousands of suppliers to make everything work properly. Therefore, when one of Intel’s suppliers cannot provide enough material at a particular point of time, the whole of the production line will face problems. A couple of years ago when a Japanese gum factory caught fire in Sumitomo , it caused prices to rise, principally because it was the only glue factory which made silicon chips work.

4. The threat of the entry of new competitors: Some industries are harder to enter than others, with all of its risks and high-price patents, is almost impossible for new firms to get in on the huge profit margins. In the inputs market, Intel is known as the no.1 company, which produces processors. Moreover, almost all the PCs and laptops around the world use Intel’s processors like Dell, Toshiba and Compaq. AMD which is considered to be the biggest rival of Intel still holds a small market share against Intel. The threat of new entrants is not very high.

5. Threat of substitute products: In case, closing substitute products are increased, the customer will tend to switch to alternatives in response to price increase. This is the product that is not quite the same but the customers can get the same value from it. For example, in the server area, the most powerful Intel server is far less powerful than most Sun Microsystems machines, but there are also far cheaper. If the customers want to have a powerhouse server, the Sun Microsystems’s product may be the potential substitute.

Market Sustainability

Environment

Intel always takes a leadership position in environmental action worldwide. Intel co-founder Gordon Moore, a long-time champion of the environment, instilled a legacy of environmental consciousness at Intel that continues today. Intel strongly encourage their employees to apply the same level of knowledge and creativity to solving the environmental challenges of design and production as they do to creating and developing the next breakthrough technology. Intel shares environmental best practices and participates with governments and other compa­nies to create a more sustainable world, taking a leadership position in developing comprehensive, long-term strategies to address climate change, resource conservation, product ecology, and more. Over the years, we have received numerous accolades for our environmental efforts.

In 2006, for example, we received the U.S. Chamber of Commerce Business Civic Leadership Center’s 2006 Corporate Stewardship Award in recognition of our decades-long commitment to education, community development, and sustainable environmental practices. In 2005, they became one of only a few companies in the world to publicly report our environ­mental, health, and safety (EHS) performance indicators on a quarterly basis. By providing our stakeholders with timely information about our emissions, resource usage, employee injuries, and waste generation, they have raised the bar in public reporting. Intel strive to minimize our environmental footprint and achieve the highest standards of environmental consciousness in everything they do—from how they design and manufacture their products to how they build and operate facilities, manage resources, and handle waste materials.

Climate Change

At Intel, they consider global warming an important environmental issue, and are proactively working to address the threat of global climate change. Intel focuses on climate change efforts in three main areas: greenhouse gas emissions, energy usage in their operations, and the energy efficiency of their products.

Greenhouse Gas Emissions

Intel has focused on minimizing impact on global warming for more than a decade. In 1996, Intel led an industry coalition to reach an agreement with the U.S. Environmental Protection Agency (EPA) to voluntarily reduce emissions of per fluoro compounds (PFCs), chemicals with a high global-warming impact. This agreement was reached a year before the Kyoto Protocol was negotiated.

2006 Highlights

Ø Became a member of the U.S. EPA’s Climate Leaders program, an industry-government partnership working to develop long-term, comprehensive climate change strategies.

Ø Joined the Chicago Climate Exchange, a voluntary, legally binding greenhouse gas emissions reduction, registry, and trading program.

Ø Became a member of The Green Grid, a global consortium of companies dedi­cated to advancing energy efficiency in data centres and computing ecosystems.

Ø Began shipping processors based on the new Intel® Core™ micro architecture, which raises the bar for energy-efficient desktop, mobile, and server computing performance.

Ø Lowered our energy use by more than 160 million kilowatt-hours.

Ø Earned the EPA’s elite National Environmental Performance Track membership for three Intel sites.

Ø Collected more than 1.5 million pounds of electronic waste at community collection events.

Ø In 1999, Intel joined other members of the World Semiconductor Council to set firm PFC emission reduction targets. Under that first-of-its-kind worldwide voluntary agreement, a goal was estab­lished to reduce emissions 10% below 1995 levels by 2010. Today, through the work of many people across the company, Intel is on track to meet this challenging goal. In 2006, Intel joined the EPA’s Climate Leaders program, an industry-government partnership working to develop goals and strategies aimed at reducing overall climate change. Partners in the program set aggressive greenhouse gas reduction goals and inventory emissions to measure progress. “Participating in the EPA’s Climate Leaders program will help raise awareness for this issue and allow us to share our learning’s with other committed companies,” said Todd Brady, Intel’s global environmental manager. We also recently joined the Chicago Climate Exchange (CCX), the world’s first and North America’s only voluntary, legally binding greenhouse gas emissions reduction, registry, and trading program. CCX members are regarded as leaders in greenhouse gas management and represent all sectors of the global economy, including public sector innovators. In addition to our existing global goals, by joining CCX, we have committed to reduce Intel’s greenhouse gas emissions in the United States by a minimum of 6% by 2010.

Energy Savings in Intel Operations

Intel has implemented a dedicated capital funding program that allocates funds solely for the purpose of conservation and efficiency projects. This program preserves the importance of these improvements and limits funds from being re-allocated for other purposes. Many energy-efficiency and conservation improvements have been implemented across Intel, including ad­ditional efficient lighting; “smart” system controls; boiler efficiency; chilled water improvements; cleanroom heating, ventilation, and air-conditioning improvements; and improved operating processes and procedures. As a result, Intel’s energy use in 2006 was reduced by more than 160 million kilowatt-hours (kWh). Since 2001, we have approved more than 200 improvement projects and saved over 400 million kWh of electricity. That’s enough energy to power more than 40,000 American homes or reduce air pollution from electricity generation equivalent to removing 50,000 automobiles from the road. Additional savings have been gained in efficiencies in natural gas and water conservation projects. Projects implemented as part of our capital funding program reduced usage by nearly 200 million gallons of water and 6 million therms of natural gas in 2006.Our publicly stated goal to reduce energy consumption by an average of 4% per production unit per year from 2002 through 2010 has already driven exceptional results. Through the end of 2006, we exceeded that goal, as our normalized energy use has declined 5.7% per year since 2002. As part of our efforts to collaborate with others on energy efficiency, we are working closely with SEMATECH (a consortium of semiconductor industry companies, suppliers, universities, and government) and with other companies to develop standards to improve the energy efficiency of manufacturing tools and processes. A recent highlight in operational energy savings includes implementation of an intensive heat recovery system in many of our wafer fabrication facilities. This technique uses waste heat from chillers to preheat air in our manufacturing cleanrooms, and can reduce natural gas consumption and corresponding carbon dioxide (CO2) emissions by 30% or more.

Energy-Efficient Products

In addition to reducing the climate change impacts of our manufacturing operations and facilities, we have taken a strong leadership position on the need for energy-efficient products to meet the demand of rising energy costs and the challenges of climate change. We are demonstrating continued progress through energy-efficient performance innovation in our design processes and architecture. In 2006, we began shipping pro­cessors based on the new Intel® Core™ microarchitecture, which raises the bar for energy-efficient performance across dual-core and quad-core desktop, mobile, and server products. Compared to processors with only one core, those with two or more cores are designed to deliver higher system throughput and simultaneous management of activities, while balancing power requirements. Intel® Core™2 Duo processors for desktops are up to 40% faster and more than 40% more energy efficient compared to previous-generation Intel desktop processors. The new Intel Core micro­ architecture-based products also include the Intel® Core™2 Duo mobile processor, which increases processor performance more than twofold and reduces power consumption up to 28% compared to previous-generation Intel architecture-based mobile processors. Our innovations have also helped drive the information technology industry as a whole to greater energy efficiency. Intel has worked through various industry groups and standards organiza­tions to drive initiatives to develop complete computing platforms that deliver more performance with lower power requirements. Working with the Natural Resources Defense Council (NRDC), we changed the design guidelines that power-supply manufacturers use to build computers, to encourage the development and adoption of more energy-efficient power supplies—earning Intel special recognition from the U.S. EPA. Under typical operating conditions, a power supply can consume up to 50% of a desktop PC’s total system power. The EPA estimates that the environmental improvements of achieving the recommended targets established in the Intel design guide will result in the following savings in the United States alone:

• Reduction in electricity use of more than 16 billion kWh

• Reduction in carbon emissions of over 10 million tons of CO2 annually

• Cost savings to end users of $1.25 billion annually Intel.

Intel’s innovations and industry leadership have helped drive the information technology industry to greater efficiency.

Design for the Environment

Building and designing the world’s most sophisticated products in cutting-edge factories involves addressing many environmental challenges, such as energy efficiency, air quality, water and materials recycling, and more. Those challenges grow in complexity as we push the technological boundaries and limits of materials science at Intel. Intel EHS engineers are involved in all phases of Intel’s product design and development pro­cesses, addressing the environmental challenges of each new generation of technology before manufacturing processes are put in place. For example, our engineers help drive the design of products that are lead-free or use less energy. They also participate in building design, calculate environmental performance levels for tools and processes, and set environmental production performance goals for each new manufacturing process technology. When Intel builds a new wafer fabrication facility (fab), we apply “Design for the Environment” (DfE) principles long before ground breaking. The cooling system of our newest fab in Oregon is an example of our DfE process. Traditional fabs use cooling towers to cool the building and provide chilled water for operations. Water is sprayed in the cooling towers, and air is blown on the water to cause cooling by evaporation. The cooled water is then re-circulated through the building’s cooling system and cooling towers. All the heat that is removed from the building goes into evaporating water. Intensive heat recovery has been implemented in many of our fabs and is included in all future fab specs. These installations include heat-recovery chillers—heat pumps that reduce the need for cooling towers by recovering some of the heat for reuse. Through this innovation, water re­quirements are reduced, as water is not lost through evaporation, and air pollution is decreased because the fab does not need to run boilers as frequently to heat water for manufacturing and facilities use. And since the process is more energy efficient, overall energy requirements for the facility are reduced. The implementation of intensive heat recovery in our fabs can reduce natural gas consumption and corresponding CO2 emissions by 30% or more.Our fabs also include separate drains that help with the segregation of waste and recycling of various materials, as well as drain configurations that facilitate water reuse. Intel also applies DfE processes to general facilities management. For example, low-water landscaping reduces water needs, while contractor incentives promote the recycling of materials during building construction.Since 1997, a strategic DfE plan enabled our Ocotillo, Arizona site to grow while maintaining envi­ronmental goals. The site worked with internal and external stakeholders to achieve these goals. Additional examples of DfE include the elimination of methanol and its related air emissions from a protective coating process that was redesigned during a technology update across one of Intel’s manufacturing processes. Intel engineers also worked to optimize ammonia use in a cleaning opera­tion. This change resulted in a 75% reduction in ammonia use and saved approximately $1 million at our Oregon site by eliminating the need to install new wastewater treatment equipment.

Our EHS engineers help drive the design of products that are lead-free or use less energy, participate in building design, calculate environ­mental performance levels for tools and processes, and set environmen­tal production performance goals for each new manufacturing process technology. LEED Building in Israel. Intel is undergoing certification for our first Leader­ship in Energy and Environmental Design (LEED)-registered green facility, a design center to be located in Haifa. The facility will use environmentally friendly building materials and construction methods, including natural and controlled lighting by means of an internal patio that infuses light into all levels from an atrium. The building will also have air-conditioning and electrical systems that will both save and recycle energy, and an irrigation system that will use only recycled water.

Leadership in Nano electronics

Intel thoroughly evaluates the health and safety implications of new technologies for our employ­ees, customers, and end users. In 2006, Intel continued working in collaboration with multiple stakeholder groups to further define, characterize, and manage the EHS implications of nano elec­tronics—the manufacture of extremely small transistor devices—in the semiconductor industry. Intel representatives took the lead in developing EHS standards on nanotechnology in several standards development organizations, including American Standards Testing Materials International and the International Standards Organization (ISO). Additionally, an Intel employee is heading ISO Technical Committee 229 on Nanotechnology, which is developing ISO health and safety standards. We continue to support the International Council on Nanotechnology (ICON) and sponsored an international ICON meeting at our Ireland site. We also led an ICON project that is performing toxicological assessments of nanomaterials. Intel is a member of the Nanoparticle Occupational Safety and Health (NOSH) Consortium, a multi-stakeholder group of industry, academic, and government institutions that is performing basic research on nanoparticle generation and characterization. The NOSH project will lay the ground­work for better monitoring potential occupational exposures to nano-sized materials and how to minimize such occurrences.

Resource Conservation

Throughout our operations, we have committed to conserving resources and minimizing waste through effective recycling and reuse programs. Water over the past 15 years, we have invested more than $70 million in water conservation programs at Intel facilities around the world. As a result of these efforts, we now reclaim more than 3 billion gallons of wastewater each year instead of tapping precious fresh-water sources. Working with tool suppliers and other industry experts, we continually seek to reduce water use in our manufacturing processes. Our ongoing conversion from 200mm to 300mm wafers, for example, has resulted in a substantial reduction in the amount of water used to build our products. In fact, with 300mm wafers, we have reduced water use approximately 40% for each square centimeter of wafer surface area compared to 200mm wafer technology. Each of our new factories is equipped with complex wastewater collection systems that include a separate drain system for collecting lightly contaminated wastewater for reuse. With this reuse strategy, we harvest as much water as possible and direct it to our facility equipment such as cooling towers and scrubbers. In 2006, we earmarked more than $2 million for water conservation projects in New Mexico, Oregon, and Ireland to improve water use efficiency and reuse. These projects were part of a larger corporate strategy aimed at sharing successes and continuing our focus on reducing our demand for fresh water. As a result of these projects, we have identified ways to save more than 1 million gallons of water each day.

Chemical Waste

Intel continues to increase the recycling rate of the chemicals used in our manufacturing pro­cesses. About 68% of our chemical waste is now recycled or directly reused. While the absolute amount of our overall waste has increased, we have exceeded our 50% recycling goal for the last three years.

Intel purchases renewable energy in three states in the U.S. We are also the largest purchaser of wind power in Oregon, we plan to expand our Oregon commitment in 2007, and we are the largest corporate supporter of a neighbourhood solar program for a utility provider in California. Food for Fuel Intel employees all over the world take “green” thinking to heart in their daily lives. Two Intel Oregon employees are good examples; they power their vehicles primarily using the vegetable oil waste from an Intel cafeteria. Reusing the vegetable oil is a win-win situation for all involved. The cafeteria saves money on disposal costs, and the employees save money on fuel and do their part for a cleaner environment, as their fuel source is cleaner than gasoline.

While trying to decrease the amount of chemical waste being shipped off-site for disposal and recycling, we have established internal strategies to reduce chemical use or treat chemical waste on-site. Our research and development teams work to eliminate and reduce material and chemical use in the manufacturing process as much as possible, but where volume reduction or elimination have not been possible, Intel engineers have developed systems to reclaim materials. For example, we use on-site ion-exchange technology to reclaim elemental copper from our liquid waste stream. Through such measures, we have reduced the environmental liability and costs of shipping tons of waste off-site while minimizing the environmental impact of our operations. Despite our best efforts, for the past five years, our chemical waste generation has been increas­ing, due in part to increasing wafer production in our factories. In addition, our processes have become more complex, and we have begun to use different chemicals in our production. We will continue to focus our efforts on reducing our chemical waste and seek new and innovative options for recycling.

Solid Waste

Intel continues to maintain a high rate of solid-waste recycling. Globally, we recycled 74% of our solid waste in 2006. We have implemented several programs focused on sustainable practices and waste reduction. For example, we composted 80 tons of food waste from the cafeterias at several of our sites, and our reuse of packing supplies diverted more than 110 tons of material from landfills.

Product Ecology

Throughout the last decade, people have become increasingly aware of how the manufacturing and use of electronics can affect the environment. As such, we strive to minimize the environ­mental impact of our operations, but also of our products at all phases in their life cycle: produc­tion, use, and ultimate disposal. The following is a summary of Intel’s involvement with several product ecology initiatives.

Materials

Traditionally, electronics manufacturing has required small amounts of lead as a building block in components and solders. Over the last decade, we have taken several measures that have allowed us to achieve lead reductions of up to 95% across all of our product lines and 100% in selected and regulated products. Beyond our own product portfolio, we have worked with our supply chain to develop standards for lead-free products. Regulatory compliance is the foundation of environmental stewardship, and complying with applicable regulations grants us a license to operate. We are compliant with the European Union Restriction of Hazardous Substances (RoHS) Directive, which sets limitations on the use of six materials, including lead. We have completed certification of RoHS-compliant materials and processes, and are now shipping millions of RoHS-compliant products per week. Additional RoHS-compliant products will be added to Intel’s product portfolio in 2007. For more information on our lead-free product efforts, visit our RoHS/Lead(Pb) Free Solutions web site. In 2007, China will implement a new regulation restricting the use of certain metals and other compounds in electronics products. The requirement covers the same materials as the European Union’s RoHS regulation of 2006. Intel has been an industry leader in working with Chinese officials to ensure that environmental protection goals are met, while helping to alleviate unnecessary administrative burdens for electronics companies. This collaborative process has been a groundbreaking effort in China due to the involvement of stakeholders in the regulatory development process.

Intel continues to maintain a high rate of solid-waste recycling. Globally, we recycled 74% of our solid waste in 2006. We have implemented several programs focused on sustainable prac­tices and waste reduction.Lightening the LoadAt an e-waste event sponsored by Intel, HP, and KOAT-TV in Rio Ran­cho, New Mexico, local resident Charles Vickery brought a truckload of old processors, monitors, TVs, and IBM typewriters

Product Packaging

We have committed to reducing the waste associated with the packaging and shipping of our products.

Among recent highlights:

· A team of packaging engineers designed a solution that allowed us to switch from non-recyclable polyurethane foam to a 100% recyclable polyethylene foam for cushioning some of our board products. We estimate that the new packaging solution will keep 113,400 pounds of non-recyclable polyurethane foam out of the waste stream each year.

· We redesigned the packaging for the Intel® Entry Storage System SS4000-E—a network stor­age solution for offices and homes—to decrease the shipping density and amount of materials used. This design change will result in an estimated savings of 2,650 pounds of plastic and 47,000 pounds of paper packaging materials annually. The shipping density improved by 56%, requiring less space to ship the same amount of product, which leads to fewer trips, lower fuel consumption, and decreased emissions.

· We reduced the thickness of thermoformed polyethylene terephthalate (PET) plastic packaging material from 1.0mm to 0.9mm without negatively affecting the protective properties and in­tegrity of our packaging solution for wireless network interface cards from our Mobility Group. This change will result in an estimated savings of 18,000 pounds of PET plastic annually.

· A team of packaging engineers in our Customer Fulfillment, Planning, and Logistics Group implemented two silicon packaging solutions that will eliminate the annual use of more than 10 million pounds of petroleum-based plastics, 1.8 million pounds of corrugated paper packaging, and 69,000 pounds of aluminum-based static-shielding bags.

· By investing in new handling equipment and reusable slip-sheets to load and move stacks of product, we have eliminated the use of an estimated 4,140 wood pallets a year. At a weight of 34 pounds per pallet, this change will result in an estimated savings of 140,760 pounds of wooden packaging materials annually. Eliminating the use of pallets also improves the ship­ping density, resulting in fewer trips, lower fuel consumption, and decreased emissions. All of these packaging innovations have positive effects on the environment that are multiplied as the products are shipped and used or integrated into our customers’ final products.

End-of-Life Solutions for Electronics

Intel sites in the United States hold computer recycling days, which provide a convenient way for people to recycle used technology respon­sibly. In 2006, we collected more than 1.5 million pounds of electronic waste (e-waste) at 10 community collection events. We are also a leading proponent of eBay’s Rethink Initiative. Through Rethink, Intel and fellow members of the initiative come together with government and environ-mental organizations to find answers to the challenge of e-waste. In addition, we work with StRUT (Students Recycling Used Technology), an organization that teaches students to refurbish used computers for use in local school districts.

EPEAT - The Electronic Product Environmental Assessment Tool

EPEAT is a rating system designed to help purchasers in the public and private sector evaluate, compare, and select desktop computers, notebooks, and monitors based on environmental attributes. Intel has been a leading partici­pant in the development of the EPEAT system, which promotes clear and consistent criteria for product evaluation, and creates market incentives to encourage environmentally friendly design of electronics products. The EPEAT system gained special recognition on January 24, 2007, when President George W. Bush signed Executive Order 13423 mandating U.S. federal agencies to buy EPEAT-registered products. For the full text of the executive order, visit the White House web site.

Although our components make up only a small part of the final electronic device sold to the consumer, we believe that our role can be significant in helping to minimize the environ­mental impact of the final product.

WEEE - The Waste Electrical and Electronic Equipment (WEEE)

Directive of the European Union (EU) recently went into effect, requiring producers of certain electrical and electronic equipment to develop programs that allow consumers to return products for recycling. The definition of “pro­ducers” under the regulation is broad and can potentially include manufacturers, distributors, resellers, and so on. Each EU member state or country has implemented, or is in the process of implementing, national legislation detailing specific requirements for WEEE. Some other non-EU countries have laws similar to the WEEE Directive, but the scope and producer responsibility requirements vary. Because Intel is primarily a component manufacturer, most of our products, such as mother­boards, microprocessors, and other components, are generally not considered within the scope of the WEEE Directive until they are incorporated into a final product. Although the final assembly and/or configuration of chassis-level server and telecommunications products are commonly completed by commercial customers, Intel considers these products to be within the scope of the WEEE Directive and provides recycling services for them. In some countries, our distributors or the company providing the product to the end user manages product recycling.

Global Involvement

Many Intel employees are passionate about the environment and sustainability issues. We seek ways to tap into that passion by encouraging our employees to connect with each other. One way that we do this is through the Intel Employee Sustainability Network, a chartered group with the mission of maximizing employee contributions to Intel’s global sustainable business performance. Members of the group work to raise employee awareness of sustainability issues, bringing in guest speakers, publishing newsletters and blogs, and volunteering for environmental projects in local communities. Intel’s EHS organization has established a vision: “Protecting Today, Creating a Better Tomorrow, Together.” The following are a few examples of the ways that Intel and its employees have carried out that vision in our communities around the world: Project XL in Arizona. Intel was an early leader in an innovative pilot program sponsored by the U.S. EPA known as Project XL (excellence and Leadership). Project XL allows participating firms greater operat­ing flexibility in exchange for commitments to superior environmental performance and public accountability. We began piloting Project XL at our Chandler site 10 years ago, establishing a stakeholder team consisting of local citizens and representatives from the EPA, the Arizona Department of Environmental Quality, the Maricopa County Environmental Services Department, the City of Chandler, and the Gila River Indian Community. Working together, the stakeholder team crafted a renewal of the environmental master plan incorporating regulated air, water, and waste requirements, and expanded the volun­tary environmental goals. These voluntary goals range from recycling, energy conservation, and water conservation to continuous improvements in manufacturing processes designed to reduce environmental impacts. Several important outcomes have emerged from our participation in Project XL, including creation of a consolidated reporting form, an integrated emergency management planning document, and a streamlined air-permitting process. Our air emissions in Arizona remain at minor-source status, even as the site continues to grow. The site also recycles more than 70% of its solid and chemical waste, and has implemented innovative strategies resulting in the conservation of many millions of gallons of water through water treatment and recharge, wastewater reuse in industrial sys­tems, and internal water reuse.

We encourage employees to connect with each other through the Intel Employee Sustainability Network, which works to raise employee awareness of sustainability issues, bringing in guest speakers, publish­ing newsletters and blogs, and volunteering for environmental projects in local communities. In addition to delivering measurable environmental benefits, Project XL allows operational flexibility, which has translated into significant economic development at our Chandler facilities, including nearly $9 billion in capital investment, creation of several thousand high-paying jobs, and a positive annual economic impact of $2.6 billion for the state of Arizona. EPA Performance Track in Arizona, Colorado, and Massachusetts. In 2006, Intel facilities in Arizona, Colorado, and Massachusetts earned the U.S. EPA’s elite National Environmental Performance Track membership, which recognizes and rewards facilities that consistently exceed regulatory requirements, work closely with their communities, and excel in protecting the environment and public health. To qualify for Performance Track membership, the EPA requires applicants to implement an independently assessed environmental management system, have a record of sustained compliance with environmental laws and regulations, commit to achieving measurable environmental results that go beyond compliance, and provide information to the local community on their environmental activities.By joining the Performance Track program, Intel will be able to network, learn, and share our experience with other members. In turn, we will work with the EPA to set voluntary environ­mental targets beyond compliance levels. For more information on the program, visit the EPA’s Performance Track web site.

Global Earth Day and EHS Education in China. On Global Earth Day in April 2006, Intel spon­sored “The Green Home Talent Challenge” on CDTV-1 in Chengdu, the location of one of Intel’s assembly and test factories. The program promoted environmental protection awareness by testing contestants’ environmental knowledge through a quiz program format. Forty finalists were selected from more than 750 contenders among the 9 districts and 11 counties of greater Chengdu to enter the last four rounds of competition. According to CDTV-1, 480,000 people tuned in to see the environmental challenge. In Shanghai, students from 16 high schools gath­ered for the Intel Cup Shanghai High School Environment Debate. Topics of discussion included creating an environmentally friendly society and a recycling ecosystem.

In September 2006, hundreds of students from the No. 2 Primary School of Hi-Tech Zone in Chengdu welcomed more than 40 Intel volunteers for a week-long program of quizzes and games promoting EHS values. The volunteers educated students about topics ranging from fire safety and food poisoning to ways to keep the air, water, and soil clean. Water Education in the Philippines. Project WET (Water Education for Teachers) is an interna­tional, interdisciplinary education program. Intel launched Project WET for elementary and high schools in Cavite in 2006. Activities included WET educator workshops, a poster-making contest, an interschool quiz, and a coastal cleanup project. Green Schools in Ireland. In November 2006, Intel Ireland held a Green Schools workshop for students and teachers from 13 primary schools. Representatives from Sustainable Energy Ireland talked about how to conserve energy and then demonstrated some experiments with the help of volunteers.

A Kildare County Council Environmental Awareness officer in attendance commented,“The workshop gave students and teachers lots of ideas and allowed them to meet with other schools with whom they can share ideas.” Nature Path in New Mexico. In 2004, we began collecting input from our neighbors in Corrales and Rio Rancho to create a plan to develop a Xeriscape nature walk along the eastern slope of our site in Rio Rancho. Work on the property was completed in 2006, following more than a $1 million investment, with a 5,000-foot-long paved path open to the community for walking, biking, and equestrian use. A 2,300-foot-long meandering path has also been constructed at the southern end of the property, offering walkers panoramic views of the Sandia Mountains and the Rio Grande River Valley. With conservation of water resources in mind, we also planted nearly 2,100 native trees and bushes on the property.

At our site in Rio Rancho, New Mexico, we created a 5,000-foot paved Xeriscape nature walk along the eastern slope that is open to the community for walking, biking, and equestrian use, and a 2,300-foot meandering path at the southern end offering panoramic views of the Sandia Mountains and the Rio Grande River Valley. With water conservation in mind, we planted nearly 2,100 native trees and bushes.

In summer 2006, an Intel grant allowed a team of Hudson science teachers to use the Assabet River as a field laboratory for their students. The grant paid for materials, teacher stipends, and consulting time from Tufts University and Earthwatch, a non­profit environmental organization. The teachers are developing a curriculum that will engage high school students in research integrating biology, chemistry, and environmental science.

Leatherback Turtles in Costa Rica. Intel technology is playing a vital role in preserving leatherback turtle populations on the Costa Rican beach of Playa Grande. Intel Costa Rica donated computers to the Leatherback Trust Foundation to help scientists collect daily information on the turtles’ nesting behaviors. The computers are linked via a wireless network, allowing direct and immediate data capture on location.Just three decades ago, hundreds of turtles made their way to the sandy shores of Playa Grande to lay their eggs each night. These days, scientists are impressed if more than 100 turtles arrive all season. Because of the turtles’ dwindling numbers, detailed records are now kept on the turtles, and scientists collect eggs to ensure that every egg produces a turtle and that every turtle survives long enough to get back to open waters.

Recognizing Environmental Excellence

Intel recognizes both internal and external environmental performance each year through the following award programs: Intel Environmental Excellence Awards. Each year, a multi-disciplined committee selects the winners of our internal Environmental Excellence Awards, which recognize individuals or project teams that have taken extraordinary measures to produce creative, effective environmental solutions for Intel.

The accomplishments of the 2006 winners included community recycling solutions and working with local communities on environmental projects and energy-efficiency projects. The winners included the Malaysia Solid Waste Recycling Team, which drove the site’s solid waste recycling to more than 73%, organized environmental programs involving 500 Intel volunteers at 78 schools, and raised donations for the World Wildlife Fund for Nature. Another winner, the corpo­rate-wide Energy Conservation Team, initiated projects that saved more than 200 million kWh and $13 million per year in energy costs, while reducing Intel’s climate change impact by 40,000 metric tons of carbon annually.

For the past six years, Intel has been a sponsor of the San Jose, California-based Tech Museum Awards, an international competition that honors innovators from around the world who apply technology to benefit humanity. The 2006 prize laureate of the Intel Environment Award was MBA Polymers, a technology com­pany that is an authority on recycling plastics from durable goods such as computers, electronics, appliances, and automobiles. MBA Polymers designed, built, and is now operating the world’s two most advanced large-scale commercial plastics plants—one in China and one in Europe—and is looking to expand into additional regions. The other Intel Environment Award laureates honored in 2006 were:

Ø Debesai Ghebrehiwet Andegergish (Asmara, Eritrea). Fuel-efficient, smokeless mogogo cook­ing stove that offers the possibility to reverse deforestation, reduce the domestic burden, and improve health and welfare in his country.

Ø Joachim Ibeziako Ezeji’s Mor (Nigeria). Improved adaptation of the slow sand filter combining the processes of coagulation offered by the moringa oleifers seed, indigenous to Nigeria, and filtration to significantly reduce the concentration of micro-organisms in water.

Our corporate-wide Energy Conser­vation Team initiated projects that saved more than 200 million kWh and $13 million per year in energy costs, while reducing Intel’s climate change impact by 40,000 metric tons of carbon annually.

Ø Fog Quest (British Columbia, Canada). Innovative, international, non-governmental, non-profit organization that implements and promotes the environmentally appropriate, socially ben­eficial, and economically viable use of fog, rain, and dew as sustainable water resources for people in arid regions of developing countries.

Ø Seawater Greenhouse (London, U.K.). Distills fresh water from seawater and cools the grow­ing environment to create optimum conditions for cultivation. The greenhouse enables crops to grow in places where it would otherwise be difficult or impossible. Driven by solar energy, the process represents a sustainable opportunity for cultivating and creating food, employment, and economic activity in arid coastal regions. The nomination period is already open for the 2007 Tech Awards. We encourage the nomination of innovative projects from all regions of the world in all subject areas: environment, economic development, equality, education, and health.

Performance Indicators

Every quarter, we review our EHS performance indicators with our senior executives. We have done this for more than 15 years, and we continue today, because these indicators are critical for managing our business.Normalized Production Index. The following graphs show some of the key indicators that we use to manage EHS performance. For the past several years, we have reported Intel’s perfor-mance in both absolute terms and per unit of production for most of our environmental indica­tors: the Normalized Production Index (NPI). The NPI is derived directly from our worldwide wafer production and is indexed to a reference or baseline year of 1999. (NPI = 100 for baseline year 1999.) With this direct correlation to Intel’s global manufacturing levels, the NPI enables more accurate year-to-year comparisons and easier analysis of overall environmental perfor­mance. The index also supports trending comparisons across semiconductor manufacturers using similar normalization methods.

Intel continues to implement energy reduction projects and remains on track to meet our goal to reduce normalized energy consumption an average of 4% per year from 2002 through 2010. Due to our continued growth, absolute water use increased 12% in 2006, and water use normalized to production was up 4%. We continue to imple­ment reuse, recycling, and reduction programs, which have saved more than 24 billion gallons of water since 1998.

In 2006, our internal supply chain management team focused on integrating the newly developed EICC performance assessment tools into our existing procurement processes. Additionally, we provided training to hundreds of our major suppliers on the latest EICC developments and our expectations for suppliers. We also reviewed our entire supplier database and selected suppliers, based on screening criteria, that may be at higher risk for non-compliance to EICC standards. We used the knowledge gained from the supplier review to help determine our 2007 goals and objectives, and to identify which internal business groups to work with in 2007. In addition, we conducted a number of audits of key supplier sites using EICC criteria and meth­odology. The data obtained from the audits was used in our supplier selection process and for training our internal supply chain team members. We prioritized audit findings based on health and safety, chemical management, management sys­tems, and working conditions. Examples of issues identified included substandard living conditions in company dormitories, non-adherence to overtime laws, and not providing proper rest breaks. Following audits at supplier sites, improvement plans are prepared to correct identified deficien­cies. Our Supplier Corporate Responsibility MRC and our commodity teams monitor and track the results to ensure progress.

Perspective of EICC Coalition Chair

The EICC coalition consists of 26 compa­nies that have come together to improve working conditions and environmental stewardship throughout the electronics supply chain. Intel’s Brad Bennett, chair­man of the coalition, said, “In 2004, the founding companies realized that even though we all were coming from slightly different positions, we could achieve meaningful improvements efficiently by working together. The willingness to focus on our common interests in social responsibility—and not our differences— is the heart of our coalition and the reason we continue to grow.

Branding – Marketing of Intel

Not many years ago computer chips, in the eyes of consumers, were a generally unknown component of PCs - a commodity product. From a competitive standpoint, a computer chip is a typical commodity. Take one out; put another in, no performance difference. Chips are something most customers don't see, many don't understand, and large numbers don't care about.

But Intel has built a brand around a commodity. Today many personal computer users can recite the specification and speed of the processor; just like car owners can tell you if they have a V4, V6 or V8 engine. The awareness of "Intel" has grown along with the awareness of the chip, and today is associated with "technology leadership," "quality" and "reliability."

The company was founded in 1968 and went public in 1971. By 1997, it controlled 90% of the world's market for personal PC microprocessors. Although the market is more competitive today, Intel is still the largest chip manufacturer in the world.

The Intel brand is one of the top ten known-brands in the world, in a class with Coke*, Disney* and McDonalds*, according to various rankings.

Brand image of Intel

Brand image is the perceptions and beliefs held by consumers, as reflected in the associations held in consumer memory. There are two attributes that Intel wanted people to associate with the brand were safety (liability) and leading technology.

Ever since Robert Noyce & Gordon Moore founded the company in 1968, their focus was on developing semiconductor memory for mainframe computers and minicomputers. Intel was already a leading company at SRAM, DRAM, ROM, etc. in the semiconductor memory industry. By the early 1970s, Intel was also developing microprocessors (also referred to “chips” processors or CPU), which represent from 20% to 40% of PC’s manufacturing cost. With the secured contract with IBM personal computer in 1983, Intel immediately set out to become a leading chip supplier of the modern era of desktop computer. Intel had soon garnered a 70% share of the overall desktop microprocessor market within a few years. To sustain the technological lead in the microprocessor was not easy in 1990s. In 1991 Apple, IBM, and Motorolla (the “AIM” alliance) banded together to produce chips based on RISC architecture. Besides, Advanced Micro Devices (AMD) also become a major competitor since it cancelled the cross-licensing agreement (started from 1976) with Intel.

In order to continue leading the technology in microprocessor development, Intel implemented overlapping development cycles in 1990. Previously, Intel had waited until one generation of microprocessor was ready for production before beginning development of the next generation, Now Intel began to “doubling up” on its R&D investing & developing two generations of chips at the same time. As for observing how Intel care about its products’ safety (liability ), We can tell from a Pentium processor flaw discovered by an end user at which Intel was confronted with its first major product-related crisis. Intel ended up replacing thousands of microprocessors at a cost of USD475 million to save the negative publicity.

The Intel position has always been based on authenticity, quality and performance, supported strongly by consistent global campaigns. The Intel Inside logo is placed on all print advertising, print and point-of-sale merchandising, shipping cartons, packaging, and is used by world brand and OEM computer manufacturers. Supported by explanatory communication material, it has to a large extent succeeded in calming the fears of consumers who are doubtful of the performance of critical and complicated product elements they do not understand. The introduction of the Intel 'Bunny people' in astronaut-type attire in an attempt to humanise and add personality to product has not been so successful, being perceived by many as cold and impersonal.

Branding strategy of Intel

As the Moore’s law said, the development of new generation microprocessors is so fast that Intel cannot afford to brand each new generation of product that was released. Marketers in Intel figured out with a solution to create an umbrella brand that could span successive generations of products. When Intel were facing a slow adoption of the 386 processor in the microprocessor market in 1988, They started to wondered if the problem had to do with Intel’s marketing, In the past, Intel focused its energy on marketing to the design engineers of computer manufacturers. But Intel realized those design engineers did not have the same influential power any more when PC market was growing rapidly. After the success of experiment at billboard advertising in a single market at Denver, Intel managers decided to deliver the marketing communication directly to consumers. The research showed that “Intel “was to best brand name to use. Intel ended up choosing their tagline: ”Intel, The Computer Inside”, and campaigning for “Intel Inside” label with OEM PC manufacturers.

Additionally Intel has developed individual product brands, as is the case with the Pentium and Pentium II range. The rationale for this is that a name like Pentium (derived from the Greek word pent meaning five and alluding to the fifth generation of X86 computer chips) provides a kind of shorthand which is more meaningful to the consumer, summarizing the benefits more easily.

Pentium II was positioned as a high performance product aimed at business and consumer users. More recently the Intel equivalent of a 'no frills' product range called Celeron has been introduced, still endorsed by the parental name, but meant for a different target audience. This is positioned around value, compatibility and quality.

With the branding strategy, consumers now are familiar that microprocessor (CPU) is most important part in a PC, and Intel’s microprocessor means reliability and best performance.

Business strategy of Intel

Intel processors were not introduced under the “Intel Inside” umbrella to consumer until 1994 when Pentium processors were released. Since then, the ingredient branding strategy has been so successful to lead Intel into a great semiconductor company. At the initial stage, the “Intel, the Computer Inside” tagline drew some offensive concern from OEM partners, such as “ If Intel is the computer, then what are we?” Therefore, marketers in Intel needed to figure out a way to implement the ingredient branding. There were several strategies being done as follows.

Ø To create more advertising in the industry

Ø To get Intel Logo on OEM’s products

Ø To attract more customers’ attention to microprocessors

Ø To establish a Intel systems group

Ø Introduce Intel’s Architecture Laboratory (IAL)

Ø Co-branding with successive release of Microsoft Windows OS

By joining the co-op advertising program, Intel‘s OEM partners would be able to accrue co-op advertising dollars on the basis of their purchases of Intel chips. These co-op advertising dollars could be used to pay for up to half the cost of any advertisement produced by the OEMs, as long as they put Intel’s logo in their ads and on their computers. With the help of booming quantity of PC magazine’s & co-op advertising program with OEMs, “Intel Inside” campaign has turned Intel, which had been a component supplier little known outside of PC industry, into a household brand name.

Besides co-op advertising campaign, Intel also established Intel systems group to manufacturing PC motherboards & chipsets, RAM in the early 1990s, This strategy facilitated more OEMs to early adopt new PC system with new generations of microprocessors ,chipsets, and RAM were plugged. Shortly after, Intel began to manufacture full-configured “white box” systems for dozens of clone PC companies in the fast growing market. At its peak in the mid of 1990s, Intel manufactured 15% of all PCs, making it the third largest party at the time.

During 1990s, Intel build a Intel’s Architecture Laboroary (IAL) responsible for many of hardware innovation of PC ,including PCI bus, PCI express, USB ,Bluetooth wireless interconnect and now-dominant architecture for multi-processor servers. Another factor that contributes Intel’s business success was the continuing release of Microsoft Windows Operation Systems, Windows 95, Windows 98, and Windows 2000, each release of OS required significantly greater processor resources. With seamless brand strategy and business strategy, Intel has been successfully delivering vivid brand image to consumers.

Should Intel apply ingredient branding to all products/markets?

Intel has been successfully implementing umbrella branding & “Intel Inside” ingredient branding campaign in the PC industry and market. About 90% of Intel revenue is from PC industry including microprocessors (desktops, laptops, servers, chipsets/motherboards, flash memory). With the success of Intel in brand image & brand strategy in PC industry and consumer market, we think it is natural that Intel marketers continue applying ingredient branding to all products/markets in order to sustain ,protect and build the brand equity. Before they come out with a new business strategy to expand brand value, there are two points needed to re-evaluate:

Ø Review competition status in different market segment:

Ø how to avoid potential co-branding disadvantage:

Review competition status in different market segment:

Intel marketers should review competition status in different market segment. We agree that Intel achieved its brand image both with successful “Intel Inside” ingredient branding campaign and its leading technology from microprocessors ( main competitors are AMD, Transmeta) and chipsets (main competitors are SIS, VIA) to flash memory in which Intel play pivotal roles in PC industry. It seems Intel did not dominate these non-PC markets. We assume that the reason Intel failed to take the lead at these segments is because most of its R&D resources were put into PC industry in order to achieve an overwhelming performance advantage against competitors. We think this is true by reviewing Intel’s revenue that 90% of revenue is from PC related components. Hence the competitors in PDA & cellular phone market can have advantages to break through the market share over Intel. With the leading technology in semiconductors industry, Intel still has advantages in the near future.

How to avoid potential co-branding disadvantage

The “Intel Inside” campaign was successful communicating with consumers that Intel components perform with excellence inside their PC. PC OEMs see the co-op advertising program in a way a great incentive to cover their production cost. While PDA & cellular phone OEMs may not agree to apply “Intel Inside” campaign and co-op advertising program with reasons bellow:

Ø Compared with PC production cost, PDA & cellular phone production cost is much lower so that there is not much incentive for Intel to convince OEMs to work together.

Ø PDA & cellular phone consumers covers not only PC users ,but also those consumer electronics (CE)users, CE users may not care too much on what’s inside of their PDAs or cellular phones but on its fashion style and user friendliness.

The above reasons may explain why PDA & cellular phone manufactures would avoid co-branding strategy with Intel. In fact, Intel observed that cost of designing high end cellular phone was raising with increasingly features complexity. Intel & Microsoft are now developing a “template” for cellular phones using chips from Intel and software from Microsoft in a hope to reduce the R&D costs allowing new entrants to participate in the market more easily. With this template as a great incentive, Intel can still sustain its key role in Cellular phone market even though no “Intel Inside” campaign in the market.

Finally, We would like to have suggestion on how to apply ingredient branding to all products/markets:

Ø Extend “Intel Inside” spirit with a tacit way, such as internet advertising, creating a new slogan and tagline. In the Web 2.0 age, we believe marketing through Youtube or other social networking sites can be a great channel to do promotion besides traditional advertising methods. Maybe a great eye-catching slogan and tagline can come out through an internet survey or contest.

Ø Put more resources on R&D and promote more technical information through annual IDF (Intel Developer Forum, held at least two times in a year). To tie with Intel’s leading technology in semiconductor industry, We suggest Intel put more R&D resources and possibly implement “double-up” overlapping development cycle to gain back the leading positions in cellular phone system because the cellular phone system upgrading speed is rather fast. With more technical breakthrough on hands, Intel will definitely succeed in leading cellular phone market through IDF platform.

Ø Create an Intel cellular phone system with some strategic partners to penetrate the market. Intel should develop its cellular phone system with hardware partner. Hardware partner such as HTC is famous in designing smart phone; Intel may still play an important role by providing chips, memory, etc., and then incorporated with Microsoft & HTC to create a new standard for the industry. By the time, Intel will have better stance to apply ingredient branding with its marketing influence and sustain its brand image to all products/markets.

Ø Renew their umbrella brands names and perception they do to their consumers. Since ingredient branding is central to the functional performance of the product, Intel should extend their brand image according the tasks their platforms do.

Repositioning Strategy

The “Intel Inside” campaign focused solely on the company’s microprocessors, such as its popular Pentium line of chips. But Intel has changed its focus to include entire platforms, including the microprocessor as well as other surrounding chips and chip sets. The new logo aims to reflect Intel’s focus on whole platforms, instead of just on its microprocessors.

As part of the major re-branding effort, the 37-year old Intel logo, its name in lower case letters and a dropped “e,” which was created by Silicon Valley pioneers Robert Noyce and Gordon Moore, has been dropped. The new logo is simply “intel” with the same swoop around the word that has circled the phrase “Intel Inside” for over two decades. The color has also been changed from electric blue to a more humane shade.

Still, “Intel Inside,” which launched in 1991, went a long way in teaching PC users something about the important components inside their computers, and helped separate the identity of the microprocessor from, say, the memory chip or graphics chip. It’s a major change. The new tag line, “Leap ahead” is meant to express what the company has made possible in the past in terms of technology, and what it intends to continue doing going forward. Eric Kim, Intel senior vice president and general manager of the Sales and Marketing Group, had the following to say about the brand shift: "Intel has one of the most valuable brands in the world, and we intend to grow the value of our brand as we evolve the company.

Intel Multiplies Entertainment

Intel has a long standing commitment with the music industry, supporting the big name artists as well as up-and-coming stars and providing them with endless creative possibilities for their music.

Intel recognised as a world leader in digital technology, creating the ultimate computing experience for work and play. The brand has a strong interest in music and views its technology as an enabler, unburdening the artist and allowing them to concentrate on creating music.

Intel identified a huge opportunity to engage with their target audience and communicate the benefits of their digital technology to all creators of music.

MySpace, one of the world’s leading social network, was perfectly positioned to deliver Intel’s message to a wider audience and create its first ever Pan-European Community. Intel wanted to target the primary consumers of their technology - the bands and artists themselves. MySpace was uniquely positioned to deliver this target audience and use these influencers to extend the campaign to the masses. The campaign targeted countries, UK, France, Italy, Spain, and Germany.

The campaign’s objectives included positioning Intel as a brand which “multiplies entertainment”, develop a relationship between music lovers and creators with technology needed to produce music and stress on the fact that music creation requires high quality technology including computer processors.

All artists were provided with a four track player to promote their music via their MySpace profile. Intel wanted to provide a strong value proposition to bands across Europe by offering an exclusive fifth track to their player, plus expert industry advice in return for becoming a “friend” of the Intel Powers Music MySpace community. Non artist end users were able to participate in the community with the creation of the Intel Supergroup, formed from the best individual band members of unsigned MySpace acts, as voted for by users across Europe. The consumers were also invited to decide the Supergroup band name and produce the artwork for their forthcoming single.

The community was supported with a range of striking, high impact media placements in the form of leaderboards, and featured profiles, plus editorial announcements including a personal endorsement from Tom, the founder of MySpace.