recent developments

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 "Intel Inside" marketing and branding campaign. 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 in turn 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[2] 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 immigrant 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.^[1][2] Gaede videotaped data from his computer screen at Intel and mailed it to AMD, which alerted Intel and authorities, resulting in Gaede's arrest.^[3] Gaede was convicted and sentenced to 33 months in prison in June of 1996.

iMac Intel Core Duo

(20-inch)

Partnership with Apple

On June 6, 2005, Apple Computer CEO Steve Jobs announced that Apple would be transitioning from its long favored PowerPC architecture to the Intel X86 architecture. Reasons stated for the change were vague but included thermal issues with recent PowerPC G5 chips and an implication that the future PowerPC roadmap was unable to satisfy Apple's needs for computing power. In particular, the large power requirement of the G5 chip and subsequent heat generation was seen as a major stumbling block, preventing the placement of such a chip in one of Apple's laptop computers. The first Apple computers containing Intel CPUs were announced on January 10, 2006. Apple initially planned to put Intel chips in all of their computers by the end of 2007,^[4] but Apple managed to have its entire consumer product line 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.^[5]

Leadership

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 will be retained as a special advisor.

Corporate governance

Current members of the board of directors of Intel are: Craig Barrett, Charlene Barshefsky, John Browne, James Guzy, Reed Hundt, James Plummer, David Pottruck, Jane Shaw, John Thornton, and [David

Intel, x86

Intel, x86 processors, 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, though IBM chose not to use that, embarking on an effort to produce its own x86 processor under a cross-licensing agreement with Intel. Compaq, the first IBM PC "clone" manufacturer, in 1985 produced a desktop system based on the faster 80286 processor 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.

386 microprocessor

During this period Andy Grove dramatically redirected the company, closing much of its DRAM business and directing resources to the microprocessor business. Of perhaps more 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 would use to ensure a consistent supply. The 8080 and 8086-series microprocessor 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 (CA), Hillsboro (OR), and Phoenix (AZ), 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.

486, 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 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, Hillsboro, Oregon, and Haifa, Israel.

Intel's 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, introduced in June 2001. The Itanium's performance running legacy x86 code did not achieve expectations, and it inititally failed to effectively compete with 64-bit extensions to the original x86 architecture, first from AMD (the AMD64), then from Intel itself (the EM64T). Intel continues to develop and deploy the Itanium and the IA-64 architecture as the Itanium 2.

During this period Intel's Hillsboro team designed and introduced the *P6 Pentium Pro in 1995, the Willamette processor (code-named P67 and P68) and marketed as Pentium 4, and finally the 64-bit extensions to the x86 architecture, present in some versions of the Pentium 4 and in the Intel Core 2 chips.

Pentium flaw

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. Nonetheless, Intel decided to correct the error in a future chip revision and did not 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[1]. 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 Microsoft's calculator tool 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 their position and decided to offer to replace every chip with a problem, quickly putting in place a large end-user support organization. This resulted in a $500 million charge against Intel's 1994 revenue.

Paradoxically, 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 "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.

SRAMS and the microprocessor

The company's first products were 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.)