Case Summary Intel
Intel Corporation Case Summary
Intel the Microprocessor giant was started in the year 1968, their initial venture was to make a semiconductor computer memory by integrating large number of transistors into silicon chips.
Intel basically starts with two engineers that leave a company called Fairchild Semiconductors. They get $2 million from a venture capitalist. They begin the process of gathering up all the smart people from Fairchild.
Intel was successful at the beginning because of their “Goldilocks strategy”, which they focused on mass production and something that competitors cannot copy easily. Because of this approach Intel was able to produce 1103, world’s first 1 kilobit DRAM. The 1103 was more cost effective to build, smaller and better in performance. The 1103 DRAM was able to replace magnetic core memory. Because of these innovations 1K DRAM was able to dominance the market for two years. Thanks to Noyce, Intel had enough patents to cross-license among established player to build specific DRAMs even though Intel was new. This is also one reason that Intel was successful at the beginning.
Then Japanese larger firms entered in to DRAM business as the demand for DRAMs were huge. And the multibillion-dollar Japanese companies like Mitsubishi and Hitachi were able produce more efficiently than Intel, which directly impact the cost and these companies were well ahead of Intel in quality also. The close relationship with equipment manufactures helped Japanese DRAM producers to improve their manufacturing process to improve the yield. Because of the large yield difference between Intel and Japanese companies, Intel started to lose the market.
Every time a new DRAM chip came out, Intel would lose more and more to their competitors. It was due to industry overcapacity, the declining market share of Intel in DRAM sector and consequently the small part of Intel’s revenue.
The next step was in 1972, when Intel invents the microprocessor. A couple of Intel scientists
Intel the Microprocessor giant was started in the year 1968, their initial venture was to make a semiconductor computer memory by integrating large number of transistors into silicon chips.
Intel basically starts with two engineers that leave a company called Fairchild Semiconductors. They get $2 million from a venture capitalist. They begin the process of gathering up all the smart people from Fairchild.
Intel was successful at the beginning because of their “Goldilocks strategy”, which they focused on mass production and something that competitors cannot copy easily. Because of this approach Intel was able to produce 1103, world’s first 1 kilobit DRAM. The 1103 was more cost effective to build, smaller and better in performance. The 1103 DRAM was able to replace magnetic core memory. Because of these innovations 1K DRAM was able to dominance the market for two years. Thanks to Noyce, Intel had enough patents to cross-license among established player to build specific DRAMs even though Intel was new. This is also one reason that Intel was successful at the beginning.
Then Japanese larger firms entered in to DRAM business as the demand for DRAMs were huge. And the multibillion-dollar Japanese companies like Mitsubishi and Hitachi were able produce more efficiently than Intel, which directly impact the cost and these companies were well ahead of Intel in quality also. The close relationship with equipment manufactures helped Japanese DRAM producers to improve their manufacturing process to improve the yield. Because of the large yield difference between Intel and Japanese companies, Intel started to lose the market.
Every time a new DRAM chip came out, Intel would lose more and more to their competitors. It was due to industry overcapacity, the declining market share of Intel in DRAM sector and consequently the small part of Intel’s revenue.
The next step was in 1972, when Intel invents the microprocessor. A couple of Intel scientists