Inside Intel: A Look at the Company’s Culture and Values

Intel, or Intel Corporation, is a well-known American brand and maker of electronic computing components. Its headquarters are located in Santa Clara, California. The name of the firm is derived from the phrase “integrated electronics.”

Intel: How it started

In July 1968, two American engineers Robert Noyce and Gordon Moore established Intel. Unlike the typical Silicon Valley start-up, Intel began with $2.5 million in investment secured by Arthur Rock, the American banker who originated the phrase, the venture capitalist. The founders were competent, middle-aged engineers with considerable careers.

As a general manager of Fairchild Semiconductor, a branch of Fairchild Camera and Instrument, in 1959, Noyce invented the silicon integrated circuit. Moore was Fairchild Semiconductor’s director of research and development. Noyce and Moore immediately hired additional Fairchild workers, like the Hungarian-born American businessman Andrew Grove, after establishing Intel. Over the first three decades of the company’s history, Noyce, Moore, and Grove all served as chairman and chief executive officer (CEO).

Intel Products

Memory chips, including the world’s first semiconductor made out of metal oxide, 1101, which was a catastrophe, were Intel’s early products. The 1103, however, a one-kilobit random-access memory (DRAM) chip, was successful and the 1st chip to store a considerable quantity of data. Honeywell Company, an American technological conglomerate, purchased it in 1970 to replace the fundamental memory technology in its computers. DRAMs soon became the dominant memory device in computers worldwide because they were less expensive and required less power than core memory.

After the success of DRAM, Intel went public in 1971. The erasable programmable read-only memory (EPROM) chip was also introduced. This would become the company’s most successful product line by 1985. In 1971, Intel engineers Ted Hoff, Federico Faggin, and Stan Mazor developed the 4004, one of the earliest single-chip microprocessors, under contract with the Japanese calculator company Nippon Calculating Machine Company. This allowed Intel to maintain the rights to the invention.

Intel’s early efforts were not entirely successful. Management chose to enter the booming digital watch industry by buying Microma in 1972. Nevertheless, Intel had no true knowledge of customers and sold the wristwatch firm in 1978 for a $15 million loss. In 1974 Intel controlled 82.9% of the DRAM chip market. However, as international semiconductor firms grew, Intel’s market share decreased to 1.3 per cent by 1984.

But, at that time, Intel had shifted its focus away from memory chips and onto its microprocessor industry. It introduced the 8008, an eight-bit central processing unit, in 1972. (CPU). Two years later, the 8080, which was ten times faster than the 8008, was unveiled, and the 8086, the company’s first 16-bit microprocessor, was released in 1978.

First PC of Intel technology

In 1981, IBM selected Intel’s 16-bit 8088 processor as the main processor (CPU) for its initial mass-produced personal computer (PC). Intel also offered microprocessors to other firms who built PC “clones” compatible with IBM’s offering. The IBM PC and its clones prompted curiosity in both desktop and portable computers. IBM had signed with Microsoft Corporation, a tiny startup in Redmond, Washington, to provide the disk operating system (DOS) for the PC. Microsoft eventually offered its Windows operating system to IBM PCs, which were termed “Wintel” computers due to their mix of Windows software and Intel CPUs which have dominated the market since their introduction.

The introduction of the 80386, a 32-bit chip in 1985, began the company’s commitment to making all subsequent microprocessors backwards-compatible with older CPUs. It was possibly the most important of the numerous microprocessors manufactured by Intel. Application developers and PC owners could thus be confident that software that worked on previous Intel machines would operate on the latest versions.

Pentium

Intel abandoned its number-oriented product naming procedures with the launching of the Pentium CPU in 1993 in favour of trademarked names for its microprocessors. The Pentium was the first Intel computer processor to use parallel, or superscalar, processing. This significantly boosted its performance. It contained 3.1 million transistors, compared to the 80486’s 1.2 million transistors.

The significantly faster Pentium CPU, when paired with Microsoft’s Windows 3. x operating system, contributed to the rapid growth of the PC industry. Although most PCs were still purchased by companies, the higher-performance Pentium computers allowed consumers to utilise PCs for multimedia graphics applications, like games, that required more processing power.

Business strategy

To attract consumers to update their Computers, Intel’s business model depended on making newer microprocessors significantly quicker than prior ones. One method would be to produce chips with much more transistors in each device. The 8088 included in the original IBM PC, for example, had 29,000 transistors, whereas the 80386 released 4 years later had 275,000. The Core 2 Quad released in 2008 has more than 800,000,000 transistors. The Itanium 9500, introduced in 2012, included 3,100,000,000 transistors. Moore’s law was named after company cofounder Gordon Moore, who noted in 1965 that the transistor count on a silicon chip would double about yearly. in 1975, he amended it to a doubling every 2 years.

To raise customer brand recognition, Intel began financing computer marketing in 1991 on the condition that the ads contain the company’s “Intel Inside” branding. Under the cooperative initiative, Intel set aside a part of the money that each computer maker spent on Intel chips each year, and from that money, Intel funded half the cost of that company’s print and television advertisements for the year. Despite the fact that the initiative cost Intel hundreds of millions of dollars per year, it had the desired impact of establishing Intel as a prominent brand name.

Bumpy road

Intel’s famous technical strength was not without flaws. The most obvious mistake was the so-called “Pentium bug,” in which an obscure section of the Pentium CPU’s 3.1 million transistors executed division erroneously. Once the device was released in 1993, company engineers found the fault but opted to remain quiet and repair it in future chip revisions. But, mathematician Thomas Nicely of Lynchburg College in West Virginia spotted the problem as well. Initially, Grove (then CEO) refused to recall the goods. However, when IBM stated that it would not ship machines with the Processor, it triggered a recall that cost Intel $475 million. Notwithstanding the Pentium catastrophe, the combination of Intel technology and Microsoft software continued to destroy the competition. Competing devices from Advanced Micro Devices (AMD), Motorola, computer workstation producer Sun Microsystems, and others hardly threatened Intel’s market dominance. As a result, the Wintel pair was repeatedly accused of monopoly. After being prosecuted by the Department of Justice, Microsoft was found guilty of being a monopolist in a U.S. federal court in 1999, while the European Commission fined Intel $1.45 billion in 2009 for suspected monopolistic conduct. In addition, Intel paid AMD $1.25 billion in 2009 to resolve a decades-long legal fight in which AMD accused Intel of forcing PC makers not to adopt its CPUs.

Disclaimer:

This information is not considered investment advice or an investment recommendation, but instead a marketing communication. IronFX is not responsible for any data or information provided by third parties referenced or hyperlinked, in this communication.