Intel: The Architecture That Would Not Die
“Intel” redirects here. For other uses, see Intel (disambiguation).Intel Corporation (NASDAQ: INTC; SEHK: 4335) is the world’s largest semiconductor company and the inventor of the x86 series of microprocessors, the processors found in most personal computers. Intel was founded on July 18, 1968 as Integrated Electronics Corporation and based in Santa Clara, California, USA. Intel also makes motherboard chipsets, network cards and ICs, flash memory, graphic chips, embedded processors, and other devices related to communications and computing. Founded by semiconductor pioneers Robert Noyce and Gordon Moore, and widely associated with the executive leadership and vision of Andrew Grove, Intel combines advanced chip design capability with a leading-edge manufacturing capability. Originally known primarily to engineers and technologists, Intel’s successful “Intel Inside” advertising campaign of the 1990s made it and its Pentium processor household names.
Intel was an early developer of SRAM and DRAM memory chips, and this represented the majority of its business until the early 1980s. While Intel created the first commercial microprocessor chip in 1971, it was not until the success of the personal computer (PC) that this became their primary business. During the 1990s, Intel invested heavily in new microprocessor designs fostering the rapid growth of the PC industry. During this period Intel became the dominant supplier of microprocessors for PCs, and was known for aggressive and sometimes controversial tactics in defense of its market position, as well as a struggle with Microsoft for control over the direction of the PC industry. The 2007 rankings of the world’s 100 most powerful brands published by Millward Brown Optimor showed the company’s brand value falling 10 places – from number 15 to number 25.
In addition to its work in semiconductors, Intel has begun research in electrical transmission and generation.
Intel headquarters in Santa Clara
Intel was founded in 1968 by Gordon E. Moore (a chemist and physicist) and Robert Noyce (a physicist and co-inventor of the integrated circuit) when they left Fairchild Semiconductor. A number of other Fairchild employees also went on to participate in other Silicon Valley companies. Intel’s third employee was Andy Grove,a chemical engineer, 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.
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 (Intel 4004) in 1971 and one of the first microcomputers in 1972,<href=”#cite_note-Intellec-1973-10 title=””><href=”#cite_note-Intel-Product-Timeline-11 title=””> 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 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 2006. Its research lab located at Cambridge University was closed at the end of 2006.
Sale of XScale business
On June 27, 2006, the sale of Intel’s XScale assets was announced. Intel agreed to sell the XScale processor business to Marvell Technology Group for an estimated $600 million in cash and the assumption of unspecified liabilities. The move is intended to permit Intel to focus its resources on its core x86 and server businesses. The acquisition was completed on November 9, 2006.
The company’s first products were shift register memory and random-access memory integrated circuits, and Intel grew to be a leader in the fiercely competitive DRAM, SRAM, and ROM markets throughout the 1970s. Concurrently, Intel engineers Marcian Hoff, Federico Faggin, Stanley Mazor and Masatoshi Shima invented the first microprocessor. Originally developed for the Japanese company Busicom to replace a number of ASICs in a calculator already produced by Busicom, the Intel 4004 was introduced to the mass market on November 15, 1971, though the microprocessor did not become the core of Intel’s business until the mid-1980s. (Note: Intel is usually given credit with Texas Instruments for the almost-simultaneous invention of the microprocessor.)
In 1983, at the dawn of the personal computer era, Intel’s profits came under increased pressure from Japanese memory-chip manufacturers, and then-President Andy Grove drove the company into a focus on microprocessors. Grove described this transition in the book Only the Paranoid Survive. A key element of his plan was the notion, then considered radical, of becoming the single source for successors to the popular 8086 microprocessor.
Until then, manufacture of complex integrated circuits was not reliable enough for customers to depend on a single supplier, but Grove began producing processors in three geographically distinct factories, and ceased licensing the chip designs to competitors such as Zilog and AMD. When the PC industry boomed in the late 1980s and 1990s, Intel was one of the primary beneficiaries.
Intel, and the IBM PC
Despite the ultimate importance of the microprocessor, the 4004 and its successors the 8008 and the 8080 were never major revenue contributors at Intel. As the next processor, the 8086 (and its variant the 8088) was completed in 1978, Intel embarked on a major marketing and sales campaign for that chip nicknamed “Operation Crush”, and intended to win as many customers for the processor as possible. One design win was the newly-created IBM PC division, though the importance of this was not fully realized at the time.
IBM introduced its personal computer in 1981, and it was rapidly successful. In 1982, Intel created the 80286 microprocessor, which, two years later, was used in the IBM PC/AT. Compaq, the first IBM PC “clone” manufacturer, produced a desktop system based on the faster 80286 processor in 1985 and in 1986 quickly followed with the first 80386-based system, beating IBM and establishing a competitive market for PC-compatible systems and setting up Intel as a key component supplier.
In 1975 the company had started a project to develop a highly-advanced 32-bit microprocessor, finally released in 1981 as the Intel iAPX 432. The project was too ambitious and the processor was never able to meet its performance objectives, and it failed in the marketplace. Intel extended the x86 architecture to 32 bits instead.<href=”#cite_note-13 title=””><href=”#cite_note-14 title=””>
During this period Andrew Grove dramatically redirected the company, closing much of its DRAM business and directing resources to the microprocessor business. Of perhaps greater importance was his decision to “single-source” the 386 microprocessor. Prior to this, microprocessor manufacturing was in its infancy, and manufacturing problems frequently reduced or stopped production, interrupting supplies to customers. To mitigate this risk, these customers typically insisted that multiple manufacturers produce chips they could use to ensure a consistent supply. The 8080 and 8086-series microprocessors were produced by several companies, notably Zilog and AMD. Grove made the decision not to license the 386 design to other manufacturers, instead producing it in three geographically distinct factories in Santa Clara, California; Hillsboro, Oregon; and the Phoenix, Arizona suburb of Chandler; and convincing customers that this would ensure consistent delivery. As the success of Compaq’s Deskpro 386 established the 386 as the dominant CPU choice, Intel achieved a position of near-exclusive dominance as its supplier. Profits from this funded rapid development of both higher-performance chip designs and higher-performance manufacturing capabilities, propelling Intel to a position of unquestioned leadership by the early 1990s.
1486, Pentium, and Itanium
Intel introduced the 486 microprocessor in 1989, and in 1990 formally established a second design team, designing the processors code-named “P5” and “P6” in parallel and committing to a major new processor every two years, versus the four or more years such designs had previously taken. The P5 was earlier known as “Operation Bicycle” referring to the cycles of the processor. The P5 was introduced in 1993 as the Intel Pentium, substituting a trademarked name for the former part number (numbers, like 486, cannot be trademarked). The P6 followed in 1995 as the Pentium Pro and improved into the Pentium II in 1997. New architectures were developed alternately in Santa Clara, California and Hillsboro, Oregon.
The Santa Clara design team embarked in 1993 on a successor to the x86 architecture, codenamed “P7”. The first attempt was dropped a year later, but quickly revived in a cooperative program with Hewlett-Packard engineers, though Intel soon took over primary design responsibility. The resulting implementation of the IA-64 64-bit architecture was the Itanium, finally introduced in June 2001. The Itanium’s performance running legacy x86 code did not achieve expectations, and it failed to effectively compete with 64-bit extensions to the original x86 architecture, first from AMD (the AMD64), then from Intel itself (the Intel 64 architecture, formerly known as EM64T). As of November 2007, Intel continues to develop and deploy the Itanium.
The Hillsboro team designed the <href=”#Willamette” title=”Pentium 4″>Willamette processor (code-named P67 and P68) which was marketed as the Pentium 4, and later developed the 64-bit extensions to the x86 architecture, present in some versions of the Pentium 4 and in the Intel Core 2 chips. Many chip variants were developed at an office in Haifa, Israel.
Main article: Pentium FDIV bug
In June 1994, Intel engineers discovered a flaw in the floating-point math subsection of the Pentium microprocessor. Under certain data dependent conditions, low order bits of the result of floating-point division operations would be incorrect, an error that can quickly compound in floating-point operations to much larger errors in subsequent calculations. Intel corrected the error in a future chip revision, but nonetheless declined to disclose it.
In October 1994, Dr. Thomas Nicely, Professor of Mathematics at Lynchburg College independently discovered the bug, and upon receiving no response from his inquiry to Intel, on October 30 posted a message on the Internet. Word of the bug spread quickly on the Internet and then to the industry press. Because the bug was easy to replicate by an average user (there was a sequence of numbers one could enter into the OS calculator to show the error), Intel’s statements that it was minor and “not even an erratum” were not accepted by many computer users. During Thanksgiving 1994, The New York Times ran a piece by journalist John Markoff spotlighting the error. Intel changed its position and offered to replace every chip, quickly putting in place a large end-user support organization. This resulted in a $500 million charge against Intel’s 1994 revenue.
Ironically, the “Pentium flaw” incident, Intel’s response to it, and the surrounding media coverage propelled Intel from being a technology supplier generally unknown to most computer users to a household name. Dovetailing with an uptick in the “<href=”#Advertising_and_brand_management” title=”Intel Corporation”>Intel Inside” campaign, the episode is considered by some to have been a positive event for Intel, changing some of its business practices to be more end-user focused and generating substantial public awareness, while avoiding (for most users) a lasting negative impression.
Intel Inside, Intel Systems Division, and Intel Architecture Labs
During this period, Intel undertook two major supporting programs that helped guarantee their processor’s success. The first is widely-known: the 1990 “<href=”#Advertising_and_brand_management” title=”Intel”>Intel Inside” marketing and branding campaign. The idea of ingredient branding was new at the time with only Nutrasweet and a few others making attempts at that. This campaign established Intel, which had been a component supplier little-known outside the PC industry, as a household name. The second program is little-known: Intel’s Systems Group began, in the early 1990s, manufacturing PC “motherboards“, the main board component of a personal computer, and the one into which the processor (CPU) and memory (RAM) chips are plugged. Shortly after, Intel began manufacturing fully-configured “white box” systems for the dozens of PC clone companies that rapidly sprang up. At its peak in the mid-1990s, Intel manufactured over 15% of all PCs, making it the third-largest supplier at the time. By manufacturing leading-edge PC motherboards systems, Intel enabled smaller manufacturers to compete with larger manufacturers, accelerating the adoption of the newest microprocessors and system architecture, including the PCI bus, USB and other innovations. This led to more rapid adoption of each of its new processors in turn.
During the 1990s, Intel’s Architecture Lab (IAL) was responsible for many of the hardware innovations of the personal computer, including the PCI Bus, the PCI Express (PCIe) bus, the Universal Serial Bus (USB), Bluetooth wireless interconnect, and the now-dominant architecture for multiprocessor servers. IAL’s software efforts met with a more mixed fate; its video and graphics software was important in the development of software digital video, but later its efforts were largely overshadowed by competition from Microsoft. The competition between Intel and Microsoft was revealed in testimony by IAL Vice-President Steven McGeady at the Microsoft antitrust trial.
Another factor contributing to rapid adoption of Intel’s processors during this period were the successive release of Microsoft Windows operating systems, each requiring significantly greater processor resources. The releases of Windows 95, Windows 98, and Windows 2000 provided impetus for successive generations of hardware.
Competition, antitrust and espionage
Two factors combined to end this dominance: the slowing of PC demand growth beginning in 2000 and the rise of the low cost PC. By the end of the 1990s, microprocessor performance had outstripped software demand for that CPU power. Aside from high-end server systems and software, demand for which dropped with the end of the “dot-com bubble“, consumer systems ran effectively on increasingly low-cost systems after 2000. Intel’s strategy of producing ever-more-powerful processors and obsoleting their predecessors stumbled, leaving an opportunity for rapid gains by competitors, notably AMD. This in turn lowered the profitability of the processor line and ended an era of unprecedented dominance of the PC hardware by Intel.
Intel’s dominance in the x86 microprocessor market led to numerous charges of antitrust violations over the years, including FTC investigations in both the late 1980s and in 1999, and civil actions such as the 1997 suit by Digital Equipment Corporation (DEC) and a patent suit by Intergraph. Intel’s market dominance (at one time it controlled over 85% of the market for 32-bit PC microprocessors) combined with Intel’s own hardball legal tactics (such as its infamous 338 patent suit versus PC manufacturers) made it an attractive target for litigation, but few of the lawsuits ever amounted to anything.
A case of industrial espionage arose in 1995 that involved both Intel and AMD. Guillermo Gaede, an Argentine formerly employed both at AMD and at Intel’s Arizona plant, was arrested for attempting in 1993 to sell the i486 and Pentium designs to AMD and to certain foreign powers. Gaede videotaped data from his computer screen at Intel and mailed it to AMD, which immediately alerted Intel and authorities, resulting in Gaede’s arrest. Gaede was convicted and sentenced to 33 months in prison in June 1996.
Partnership with Apple.
On June 6, 2005, Apple CEO Steve Jobs announced that Apple would be transitioning from its long favored PowerPC architecture to the Intel x86 architecture, because the future PowerPC road map was unable to satisfy Apple’s needs. The first Macintosh computers containing Intel CPUs were announced on January 10, 2006, and Apple had its entire line of consumer Macs running on Intel processors by early August 2006. The Apple Xserve server was updated to Intel Xeon processors from November 2006, and is offered in a configuration similar to Apple’s Mac Pro
Core 2 Duo advertisement
nt controversyIn 2007, the company released a print advertisement for its Core 2 Duo processor featuring six African American runners appearing to bow down to a Caucasian male inside of an office setting (due to the posture taken by runners on starting blocks). According to Nancy Bhagat, Vice President of Intel Corporate Marketing, the general public found the ad to be “insensitive and insulting”. The campaign was quickly pulled and several Intel executives made public apologies on the corporate website. [e
In September 2006, Intel had nearly 100,000 employees and 200 facilities world wide. Its 2005 revenues were $38.8 billion and its Fortune 500 ranking was 49th. Its stock symbol is INTC, listed on the NASDAQ. As of February 2009 the biggest customers of Intel are Hewlett-Packard and Dell. 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 1998 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.
Unlike its Silicon Valley counterparts, Intel has a fairly strict meritocracy that rewards work generously and does not keep underperforming employees around for very long. However, the workplace environment is fairly casual and the company heavily promotes a Work/Life balance. Employees tend to dress casually and speak precisely.
The firm promotes very heavily from within, most notably in its executive suite. The company has resisted the trend toward outsider CEOs. Paul Otellini was a 30-year veteran of the company when he assumed the role of CEO. All of his top lieutenants have risen through the ranks after many years with the firm. In many cases, Intel’s top executives have spent their entire working careers with Intel, a very rare occurrence in volatile Silicon Valley.
Intel has a mandatory retirement policy for its CEO when they reach age 65, but only one CEO, Barrett, has actually retired at 65. Previous CEOs all retired before reaching that age; Grove retired at 62, while both Robert Noyce and Gordon Moore retired at 58. At 57, Otellini has a long career at the helm ahead of him, assuming he goes until age 65 and performs satisfactorily.
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. Intel is not alone in this policy. Hewlett-Packard, NVIDIA have similar no-office policy.
Outside of California, the company has facilities in China, Costa Rica, Malaysia, Mexico, Israel, Ireland, India, Philippines, Poland, Russia, and Vietnam internationally. In the U.S. Intel employs significant numbers of people in California, Colorado, Massachusetts, Arizona, New Mexico, Oregon, Texas, Washington, and Utah. In Oregon, Intel is the state’s largest private employer with over 16,000 employees, primarily in Hillsboro. The company is the largest industrial employer in New Mexico while in Arizona the company has over 10,000 employees.
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.
Intel received a 100% rating on the first Corporate Equality Index released by the Human Rights Campaign in 2002. It has maintained this rating in 2003 and 2004. In addition, the company was named one of the 100 Best Companies for Working Mothers in 2005 by Working Mother magazine. However, Intel’s working practices still face criticism, most notably from Ken Hamidi, a former employee who has been subject to multiple unsuccessful lawsuits from Intel.
Funding of a school
Intel stock price, Nov 1986 – Nov 2006
Intel’s market capitalization is $77.14 billion (November 6, 2008). It publicly trades on NASDAQ with the symbol INTC. A widely-held stock, the following indices comprise Intel shares: Dow Jones Industrial Average, S&P 500, NASDAQ-100, SOX (PHLX Semiconductor Sector), and GSTI Software Index.
Intel has become one of the world’s most recognizable computer brands following its long-running “Intel Inside” campaign. The campaign, which started in 1991,<href=”#cite_note-40 title=””> was created by Intel marketing manager Dennis Carter.<href=”#cite_note-41 title=””> The five-note jingle was introduced the following year and by its tenth anniversary was being heard in 130 countries around the world. The initial branding agency for the “Intel Inside” campaign was DahlinSmithWhite Advertising of Salt Lake City. The “Intel swirl” logo was the work of DahlinSmithWhite art director Steve Grigg under the direction of Intel president and CEO Andy Grove.
The Intel Inside program was supportive of advertisers and further served to broaden the company’s awareness as a key ingredient inside PCs. Intel paid some of the advertiser’s costs for an ad that used the “Intel Inside” logo. If the ads did not meet agreed upon requirements, Intel was not obligated to reimburse costs. PC companies advertising products containing Intel chips include the jingle in their film and television advertisements in order to receive the reimbursement.
The well known
Intel Inside slogan
The Centrino advertising campaign has been hugely successful, leading to the ability to access wireless internet from a laptop becoming linked in consumers’ minds to Intel chips. In the UK this has caused some controversy, as the ASA upheld complaints that this was a misleading advert.
Before its phase-out, the ‘Intel Inside’ logo was modified to resemble the original Intel logo by lowering the Intel ‘e’ and changing the typeface.
In December 2005, Intel phased out the “Intel Inside” campaign in favor of a new logo and the slogan, “Leap ahead”. The new logo is clearly inspired by the “Intel Inside” logo.
In mid January 2006, Intel announced that they were dropping the long running Pentium name from their processors. The Pentium name was first used to refer to the P5 core Intel processors (Pent refers to the 5 in P5,) and was done to circumvent court rulings that prevent the trademarking of a string of numbers, so competitors could not just call their processor the same name, as had been done with the prior 386 and 486 processors. (Both of which had copies manufactured by both IBM and AMD). They phased out the Pentium names from mobile processors first, when the new Yonah chips, branded Core Solo and Core Duo, were released. The desktop processors changed when the Core 2 line of processors were released.
In March 2007, the Intel logo was shown briefly in one of the scenes of the movie, “The Last Mimzy.”
As from 2008, Intel plans to shift the emphasis of its “Intel Inside” campaign from traditional media such as television and print to newer media such as the Internet. Intel will require that a minimum of 35% of the money it provides to the companies in its co-op program be used for online marketing.
Intel’s “Intel Inside” campaign has generally been considered to be world class marketing. However, over the years there have been several plays on the Intel branding scheme which have appeared on the web. While such jabs at Intel are obviously beyond the company’s ability to control, they do tend to show that not everyone believes that Intel’s programs and policies are always world class. For example, there is the popular “evil inside” logo, the ubiquitous picture of a tombstone with “R.I.P Intel Inside”
The famous “D? D? G? D? A?” jingle, sonic logo, tag, audio mnemonic (MP3 file of sonic logo) was produced by Musikvergnuegen and written by Walter Werzowa from the Austrian 1980s sampling band Edelweiss.
Open source support
Intel has a significant participation in the open source communities. For example, in 2006 Intel released MIT-licensed X.org drivers for their integrated graphic cards of the i965 family of chipsets. On other occasions, Intel released FreeBSD drivers for some networking cards,<href=”#cite_note-47 title=””> available under a BSD-compatible licence, which were also ported to OpenBSD. Intel also released its EFI core named as EDK under a BSD-compatible licence. Intel runs Moblin project and LessWatts.org campaigns.
However, after the release of the wireless products called Intel Pro/Wireless 2100, 2200BG/2225BG/2915ABG and 3945ABG in 2005, Intel was criticized for not granting free redistribution rights for the firmwares that are necessary to be included in the operating systems for the wireless devices to operate. As a result of this, Intel became a target of campaigns to allow free operating systems to include binary firmwares on terms acceptable to the open source community. Linspire–Linux creator Michael Robertson outlined the difficult position that Intel was in releasing to Open Source, as Intel did not want to upset their large customer Microsoft.<href=”#cite_note-M.Robertson-50 title=””> Theo de Raadt of OpenBSD also claimed that Intel is being “an Open Source fraud” after an Intel employee presented a distorted view of the situation on an open-source conference. In spite of the significant negative attention Intel received as a result of the wireless dealings, the binary firmware still has not gained a license compatible with free software principles.
In 2003 there was 1.4 tons of carbon tetrachloride measured from one of Intel’s many acid scrubbers. However, Intel reported zero release of carbon tetrachloride for all of 2003. Intel’s facility in Rio Rancho, New Mexico overlooks a nearby village, and the hilly contours of its location create a setting for chemical gases heavier than air to move along arroyos and irrigation ditches in that village. This has reportedly led to adverse effects in both animals and humans. Examinations of deceased dogs from the area have returned reports of high levels of toluene, hexane, ethylbenzene, and xylene isomers in their lungs.
In the June-July time frame of 2006, Intel reported that there were VOC releases of more than 1580 pounds.
During the 1980s, Intel was among the top ten worldwide semiconductor sales leaders (10th in 1987), dominated by Japanese chip makers. In 1991, Intel achieved the number one ranking and has held it ever since. Other top semiconductor companies include AMD, Samsung, Texas Instruments, Toshiba and STMicroelectronics.
Competitors in PC chipsets include VIA Technologies, SiS, ATI, and Nvidia. Intel’s competitors in networking include Freescale, Infineon, Broadcom, Marvell Technology Group and AMCC, and its competitors in flash memory include Spansion, Samsung, Qimonda, Toshiba, STMicroelectronics, and Hynix.
The only major competitor to Intel on the x86 processor market is Advanced Micro Devices (AMD), with which Intel has had full cross-licensing agreements since 1976: each partner can use the other’s patented technological innovations without charge after a certain time.<href=”#cite_note-Intel-AMD_deal_2001-55 title=””> However, the cross-licensing agreement is canceled in the event of an AMD bankruptcy or takeover. Some smaller competitors such as VIA and Transmeta produce low-power processors for small factor computers and portable equipment.
In September 2005, Intel filed its response to an AMD lawsuit, disputing AMD’s claims, and stating that its business practices are fair and lawful. In its rebuttal, Intel laid out the skeleton of its legal defense, which included a deconstruction of AMD’s offensive strategy and levied the charge that AMD’s long struggling market position is largely a result of bad business decisions and management incompetence, including underinvestment in essential manufacturing capacity and over-reliance on contracting out chip foundries.
Legal experts predict the lawsuit will most likely drag out for a number of years, since Intel’s response indicates they are not likely to try to settle with AMD. A court date has been granted in 2010.
In October 2006, a <href=”#Lawsuit_against_Intel_Corporation” title=”Transmeta”>Transmeta lawsuit was filed against Intel for patent infringement covering computer architecture and power efficiency technologies. In October 2007, the Transmeta-Intel lawsuit was settled, with Intel agreeing to pay an initial US$150 million and US$20 million per year for the next 5 years. Both companies agreed to drop lawsuits against each other while Intel was granted a perpetual non-exclusive license to use current and future patented Transmeta technologies in its chips for 10 years.
Anti-competitive allegations by regulatory bodies
In 2005, the company violated Japanese Antimonopoly Act, local Fair Trade Commission concluded. The commission ordered Intel to eliminate discounts that discriminated its competitor Advanced Micro Devices. To avoid a trial, Intel agreed to comply.
In July 2007, the European Commission formally accused Intel of anti-competitive practices, mostly against its main competitor AMD. The allegations, going back to 2003, include giving preferential prices to computermakers getting most or all chips from Intel, paying computer makers to delay or cancel the launch of products using AMD chips and providing chips at below cost to governments and educational institutions. Intel responded that the allegations were unfounded and instead qualified its market behavior as consumer-friendly. General counsel Bruce Sewell also responded that the Commission had misunderstood some factual assumptions concerning price and manufacturing costs.
In February 2008, a spokesman for the company announced that Intel’s office in Munich had been raided by European Union competition regulators investigating its business practices. Intel reported that it was cooperating with investigators. If found guilty of stifling competition, Intel could be fined up to 10% of its annual revenue. Rival AMD also subsequently launched a website focusing on these allegations. In June 2008 the EU has filed new competition charges against Intel.
In September 2007, South Korean regulators formally accused Intel of breaking antitrust law. The inquiry began in February 2006 when officials raided Intel’s South Korean offices. The company risked being fined up to 3% of its annual sales if found guilty. In June 2008, South Korea’s Fair Trade Commission ordered Intel to pay a fine of $25.5 million for taking advantage of its dominant position to offer incentives to major Korean PC manufacturers on the condition of not buying products from rival AMD.
New York started an investigation of Intel in January 2008 on whether the company violated antitrust laws in pricing and sales of its microprocessors. In June 2008 Federal Trade Commission opened a formal antitrust investigation for this case.