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Intel is a great success story

Intel is a great success story
Intel is a great success story

The advent of the microprocessor has changed the technology industry, making it possible to make personal computers and mobile devices. By the early 21st century, more than 80% of PCs worldwide ran on Intel microprocessors. The corporation has created technologies that we can no longer do without. Let’s remember where her story began. Intel is a great success story.

Intel is the world’s largest semiconductor manufacturer with operations in the United States, Europe and Asia. The company was founded in 1968, when its creators felt that they did not pay enough attention to innovation.

The corporation now produces a variety of equipment: motherboards, flash memory, switches, routers, chips and more.

Intel remains one of the most important players in the market thanks to a combination of competent marketing, support for research and development, a healthy corporate culture and cooperation with major manufacturers, as well as Microsoft Corporation – a leading software developer.

The founders of Intel

Gordon Moore received a PhD in Chemistry and Physics from the California Institute of Technology, Pasadena. He later took a job in a laboratory of applied physics at Hopkins University, but soon decided that working in the private field had more potential.

He was very interested in the capabilities of transistors – at the time of a recent invention, which has not yet had practical application in industry. In 1956, Moore returned to California to work in the laboratory of William Shockley, one of the Nobel laureates and inventors of transistors.

Robert Noyce received his doctorate in solid state physics from the Massachusetts Institute of Technology. His dissertation was related to transistors. In 1956, while still a member of the Philco Corporation, he met William Shockley and began working in his laboratory.

Where did it all begin

Shockley turned out to be a bad leader. The atmosphere of total control negatively affected the results of work and the morale of the team. In 1957, eight of his employees resigned, nicknamed the “treacherous eight,” and formed the new Fairchild Semiconductor Corporation as a subsidiary of Fairchild Camera and Instrument Corporation.

In 1959, Moore became head of research and development. Robert Neuss was appointed CEO.

Prerequisites for microprocessor technologies

In 1958, Gene Herney, one of the eight founders of Fairchild Semiconductor Corporation, came up with the idea of ​​placing a layer of silicon oxide on transistors to protect them from dirt, dust, and other contaminants. After that, it became possible to improve the device. Previously, Fairchild made transistors on large plates, cut out components and connected them with wires, but now it was possible to place them on a single plate – so there was an integrated circuit.

The idea came to Robert Noyce and Jack Kilby of Texas Instruments Incorporated at the same time. However, Neuss had a larger vision: he developed planar technology, a method of making chips in which metal bonds are sunk into a plate. Noyce and Fairchild Semiconductor later received a patent for it.

History of Intel development

Neuss and Moore later admitted that Fairchild Semiconductor did not pay enough attention to development. They decided to start their own company and turned to venture capitalist Arthur Rock for help. At the time, their business plan was only one page long. Rock trusted Neuss and Moore and provided $ 3 million as start-up capital.

On July 18, 1968, the founders registered a company called N M Electronics, but soon changed its name to Intel (from English. Integrated electronics, “integrated electronics”). Before becoming a public company in 1971, Intel attracted another $ 2 million investment.

Noyce and Moore formed a special culture of governance that eventually spread to Silicon Valley. They denied hierarchy and supported creativity. The third most important at Intel was Andrew Grove, who was able to effectively organize the work and maintain discipline. In fact, thanks to him, Moore’s Law worked: the number of transistors placed on the integrated circuit doubled regularly – every 18 or 24 months.

In 1992, Intel’s annual net income exceeded $ 1 billion for the first time.

At the same time, Intel began to develop not only chips, but also components for computers. With the advent of the Pentium line, the company began producing chipsets and motherboards. Dozens of manufacturers later began building Pentium-based computers.

In the mid-1990s, PC sales grew, and Intel continued to develop more powerful microprocessors. In 1995, the Pentium Pro appeared on the market with 5.5 million transistors, capable of performing up to 300 million operations per second.

Intel then added multimedia extension technology to the Pentium line to improve PC performance. By 1996, the company’s revenue reached $ 20.85 billion, and net profit rose to $ 5.16 billion.

In November 1999, Intel was included in the Dow Jones Industrial Average.

However, the company has not forgotten about its main specialization. In 1999, Intel made its biggest launch, unveiling 15 Pentium III and Pentium III Xeon processors at the same time.

The first products

Neuss and Moore’s modest business plan was to produce large-scale integrated semiconductor memory cards. Then they were ten times more expensive than standard cards on magnetic cores. However, the cost was gradually declining, and the founders of Intel believed that their development would soon replace obsolete components.

Within a few months of launch, the company released the 3101 Schottky bipolar memory, a high-speed random access memory (RAM) chip. This product became quite popular; Intel existed due to its sale until 1969, when it introduced the metal oxide semiconductor chip 1101.

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In 1970, Intel released the 1103, the first 1GB dynamic high-speed DRAM chip. It was the first chip to hold a significant amount of information. Soon the 1103 chip replaced the magnetic cores. In the end, DRAM proved to be an indispensable component of a personal computer.

Not all Intel business solutions were successful. In 1972, the corporation decided to start production of digital watches and acquired Microma. However, it lacked an understanding of the market, and in 1978 it sold an asset with a loss of $ 15 million.

In 1974, Intel accounted for 82.9% of the DRAM chip market. In 1984 – 1.3%.

Competition from foreign semiconductor manufacturers grew, and Intel focused on microprocessors.

The first microprocessors

1971 was a revolutionary year for the computer industry. Under a contract with Japanese calculator maker Nippon Calculating Machine Corporation, Intel developed the world’s first microprocessor 4004. Working on this order, Hoff came up with a plan for a central processing unit (CPU) on a single chip.

Although Intel initially saw microprocessors as an enhancement to increase computer memory, it later assessed their potential.

In 1972, the 8008, an 8-bit microprocessor developed with the 4004 but focused on data and symbol processing rather than arithmetic operations, was introduced.

In 1974, the first general-purpose 8080 microprocessor was launched. For $ 360, Intel sold an entire computer on a single chip, while other PCs cost thousands of dollars. The 8080 soon became the industry standard, and Intel became the market leader in 8-bit systems.

Intel has made every effort to make its architecture the market standard. When the International Business Machines Corporation (IBM) began installing the 8008 microprocessor in its computers in 1980, Intel seemed to beat the competition.

In 1971, Intel developed another revolutionary product – erasable programmable non-volatile memory (EEPROM). Intel physicist Dov Froman worked on the reliability of the silicon gate used in metal oxide semiconductor chips. So he realized that “floating” shutters can be used to create a new generation of chips.

Conventional ROM chips had to be constantly programmed, as any changes required the manufacture of a new chip. But now Intel has been able to offer customers chips that can be washed and reprogrammed using ultraviolet light and electricity. At the time of launch, SPPZU was just a novelty, but microprocessors created a demand for it.

Another important development of Intel at that time were peripheral chips optimized for specific tasks. They have significantly expanded the capabilities of the computer without increasing the cost of software development

One of the most important developments in the field of peripherals was the coprocessor. In fact, it was an extension of the CPU and allowed more efficient processing of resource-intensive tasks. Yes, thanks to innovation, Intel is once again ahead of its competitors.

AMD and Intel: partnership and competition

It was too risky for IBM to have a single chip supplier. Therefore, in 1976, Intel and Advanced Micro Devices (AMD) entered into a cross-licensing agreement, and in 1982 decided to share technology.

However, in the 1980s, Intel refused to disclose information about the new 80386 processor.

In 1991, AMD filed a $ 2 billion antitrust lawsuit against Intel, claiming that the company was illegally securing market monopoly status. In 1995, the companies announced that they had reached an agreement. AMD has received an indefinite license for the microcode processors 80386 and 80486.

Intel later received complaints from the US Federal Trade Commission, the European Commission, regulators in Japan and South Korea.

In 2006, AMD filed a complaint against Intel with the Federal Cartel Office of Germany, alleging that the agreement between Intel and Media Markt prevented the sale of computers based on AMD processors.

In 2007, the European Commission accused Intel of violating antitrust laws. The agency ruled that the company offered discounts to PC makers who bought most processors from Intel, paid for delays or discontinuations of AMD-based products, and sold their processors below cost at auctions with AMD.

In 2009, Intel and AMD settled all antitrust and patent disputes. Intel has agreed to pay AMD $ 1.25 billion, agreeing to a number of business practices and a five-year cross-licensing agreement.

It is worth noting that the victories in the lawsuits did not give AMD a significant advantage: Intel was actively developing innovations, and at the time of patent transfer technology was no longer advanced. In 1999, AMD introduced the high-performance Athlon processor, which was to compete with the Pentium. In response, the Core series was launched.

History of Intel processors: Intel Core

In 2006, Intel released the Core 2 Duo E6320 processor (4 MB cache, clocked at 1.86 GHz, system bus frequency 1066 MHz). The Core Duo had two cores and was to compete with the AMD Athlon X2 and Opteron processors.

Prior to that, the company significantly changed its market position. Prices for the Pentium and Pentium D were lowered to drag AMD into a price war in 2005-2006. The Core 2 Duo processor helped Intel once again overtake AMD in performance.

It is worth noting that the numbers in the names of processors (i3, i5, i7, etc.) do not indicate the number of cores, but performance. The company regularly produces new generations of microprocessors: each development cycle takes about a year and solves one of the tasks:

  • reduction of the technological process using the existing microarchitecture (“tick” cycle);
  • release of processors based on the new microarchitecture (“yes” cycle).

The “tick-tock” strategy was introduced in 2006, but was adjusted 10 years later: now “tick” is a process, and “yes” is architecture and optimization.

In 2008, an improved 45-nm Nehalem series was released. These processors had from one to four cores. It was the first Intel processor with Turbo Boost technology that could run at 3.6 GHz for short periods of time. Thanks to the improvements, Nehalem was able to run twice as fast as Core 2 processors. Nehalem-based processors were sold under the brands Celeron, Pentium, Core i3, Core i5, Core i7 and Xeon.

Later, a 32-nm version of the Nehalem matrix was created, which was named Westmere. Its basic architecture has not changed, but due to the reduced size inside the processor managed to accommodate additional components – instead of four cores Westmere contained up to 10.

Subsequent generations were called Sandy Bridge, Ivy Bridge, Haswell, Broadwell, Skylake, Kaby Lake, Coffee Lake and Coffee Lake Refresh. Intel Vice President Gregory Bryant recently announced the completion of Meteor Lake based on the 7-nm Enhanced SuperFin process. These processors will be released in 2023.

Corporate culture and crisis solutions

The company grew rapidly: if in 1968 the staff had 12 employees, in 1980 it grew to 15 thousand. This required a careful approach to corporate culture.

Noyce, Moore, and Grove remembered being disappointed by Fairchild’s bureaucracy and tried to develop an easier management style. In the early stages, they kept in touch with staff at informal weekly lunches, but over time this became impossible.

Therefore, the founders have developed their own corporate policy.

  • Particular attention was paid to openness, discipline, the ability to make important decisions even at the lowest levels, rather than bureaucracy.
  • Top managers also tried to avoid such extra luxuries as limousines, expensive lunches and private parking to be on par with their subordinates.
  • As a reward, employees received options on Intel shares.
  • Technological breakthroughs were marked by the exclusive Vintage Intel champagne. In 1983, the company’s annual sales reached $ 1 billion for the first time.
  • In 1974, during the recession, Intel was forced to lay off 30% of its employees. This seriously affected the morale of the company.

In 1981 another crisis took place. However, instead of cuts, Intel accelerated the development of new products with a “125 percent solution.” This approach meant that for six months, employees with a non-standard working day worked overtime for two hours without pay.

In 1982, the resumption of sales was short-lived, and Intel decided again to do without layoffs. Instead, wages were reduced by 10%, but were restored by June 1983.

Marketing policy

Initially, Intel products were unknown to the end user. If in the 1980s the company was the market leader, then over time it began to lose to competitors. In 1991, she lost an AMD patent dispute and realized that positioning needed to change positions.

In the course of the study, Intel identified a market segment tentatively named “those who succeed.” The company decided to present its chips as a premium product that meets the needs of this audience. To do this, it used its strengths – funds, innovation, compatibility with products from different manufacturers and the ability to create processors of both low and high price categories.

Intel products were positioned as a “necessary ingredient”, and the advertising slogan sounded like Intel Inside. Previously, processor models received a number. However, the next generation was called the Pentium – it was easier to write, pronounce and memorize. Subbrands had their own designations.

Eventually, the brand vision was transformed. Nowadays, marketing campaigns are aimed at millennials, who are important not only as buyers, but also as individuals who will make business decisions in the future.

To attract a new audience, Intel acts as a partner for entertainment events – the Super Bowl, the Grammy Awards, the NBA and many others.

Intel now

In recent years, Intel has faced a number of problems, postponed the release of the latest generation of chips and lost its contract with Apple (now the Mac uses chips made by Apple).

In 2019, Intel withdrew from the mobile phone segment, and a year later reduced its presence in the computer memory market. In 2020, Intel lost market share of chips to its competitors: AMD, Samsung and TSMC.

In early 2021, Bob Swan resigned, having served as Intel’s chief financial officer since 2016, and in 2019 was appointed interim CEO. Pat Helsinger has been appointed the new head of Intel.

He has already unveiled Intel’s new strategy: to double chip production and fulfill orders for other brands to compete with Asian manufacturers. The plan was supported by Microsoft, Amazon, Cisco, Google, IBM and Qualcomm.

Intel and its founders have made a huge impact on the technology industry. It is not easy to predict in which direction it will develop. However, the corporation has already proven that it can adapt and see new opportunities. And this is something she should learn.