b a401 intel corporation part3

Intel Product Line and Situation in Late 1984

Intel Product Line and Situation in Late 1984

By the end of 1984, logic product were the dominant source of Intel’s revenue.

The 80186 and 80286 were tremendously successful.

IBM PC purchased microprocessors either from Intel .

Intel Product Line and Situation in Late 1984

The only serious 16-bit architectural

competitor was Motorola.

Intel had developed a microcontroller

which integrated logic and memory to

provide one-chip computer which

were used to control everything

from house fans to complex satellites.

Intel Product Line and Situation in Late 1984

Late 1985 was the successor to the 80268, the 32-bit 80386 microprocessor.

Motorola had developed a strong 32-bit product, the 68020,and was

already in the marketplace

winning designs.

Intel Product Line and Situation in Late 1984

The 80386 was scheduled to be one of the

first product made with the new

complementary MOS (CMOS) process.

Intel Product Line and Situation in Late 1984

In 1984, the Livermore group was developing two distinct processes for SRAM and microprocessor.

The high-volume SRAM segment demanded a new four-transistor cell design and process. By contrast, the high-speed SRAM and the new 80386 microprocessor both demand six-transistor CMOS design.

Intel Product Line and Situation in Late 1984

The high-volume SRAM process required a complex polysilicon resistor technology.

Eventually,they decided to drop the polysilicon resistor process and go with six-transitor (focus on 386).

Intel Product Line and Situation in Late 1984

Development the 386 with a double

metalization process while as the same

time to reducing line widths to 1.5µm

(from 2µm) and implementing the CMOS process.

Intel Product Line and Situation in Late 1984

Market and technology development which may have contributed to the loss of a competitive SRAM product.

- SRAM received less attention for high-quality designer.

- They had a strong position in high-speed SRAM but they give it up without really making a conscious decision.

Intel Product Line and Situation in Late 1984

The end of 1984 represented the same

30% of revenue that MSO had represented

in 1973. While a great deal of system business

comprised development products aimed at

microprocessor and microcontroller users.

Manufacturing and Process Fungibility

Manufacturing and Process Fungibility

Intel took great pain to standartlize each facility as it expanded its manufacturing base

Each Intel chip would

“look and taste” the same

no matter which facility produced it

Manufacturing and Process Fungibility

As larger-diameter silicon wafers became available,Intel developed a process on one line and then transferred the technology to its other facility.

By 1984,Intel had seven fab in the united States.Due to more stringent manufacturing standard, the cost of a fab area had risen dramatically since the 1970s.

Manufacturing and Process Fungibility

Around the time they were deciding to put up a fab in Israel or Japan

- Israel had tremendous government subsidies and good labor market.

- Japan have a tapped the expertise

of Japanese DRAM technology

development,silicon maker and

the infrastructure support.

Manufacturing and Process Fungibility

There are three main process areas : fabrication,assembly and test.

Fabrication is usually the bottleneck in times of tight capacity. – the good one was allocation.

The finance group thought of DRAM as a “low ROI,high beta” product line.

Environmental Forces

Environmental Forces- Competitors -

1.U.S. full line digital design and supply houses

- Motorola: produced DRAM,

microcontroller and microprocessor

- National Semiconductor

- Texas Instrument : microprocessor

Environmental Forces- Competitors -

2. AMD

3. Japan- Hitachi, Fujitsu, NEC, Toshiba

- DRAM SRAM and EPROM. Served second source to U.S. microprocessor microcontroller suppliers

DRAM Situation in 1984Loss of Leadership Position

DRAM Situation in 1984Loss of Leadership Position

By the end of 1984,Intel had lost significant market share in DRAM.The first real difficulties had come with the 64K generation.

Ron Whittier said that 64K version,

the memory cell size was reduced,

but the actual die size still had to be increased significantly.

DRAM Situation in 1984Loss of Leadership Position

The DRAM group calculated that the

required die size would be too big.The 64K

DRAM would be too slow to be acceptable,

In order to boost yield,the group decided to

build in redundancy at the chip level.

DRAM Situation in 1984Loss of Leadership Position

Redundancy – Intel added an extra column of memory elements so that in the event of a process-induced defect,the auxiliary column could be activated.There was a physical switch, or “fuse” built into each column which could be address by the tester machinery.

DRAM Situation in 1984Loss of Leadership Position

TI ,engineers had concluded redundancy would not be economical and

had deferred the discussion

until the next generation.

Attempts to Regain Leadership Position

Attempts to Regain Leadership Position

NMOS to CMOS

- CMOS circuit was more complex

- used in laptop Intel produced CMOS 64K and 256K

DRAM in a niche strategy.

Attempts to Regain Leadership Position

In1983

Demand was in an upswing,and Intel seemed to have a techonology strategy which could lead to dominance in the 1-meg DRAM.

Attempts to Regain Leadership Position

In 1984

CMOS DRAM price at about one and a half to two times the prevailing NMOS price.

Niche strategy : differentiate the product from other offering, and sell it on features.

Attempts to Regain Leadership Position

The price of NMOS DRAMs fell by 40% from

May to August 1984. By late 1984 Intel was down to less than 4%

of the 256K market and had lost its position

entirely in 64K DRAMs.

Attempts to Regain Leadership Position

In the future The 1-meg DRAM will be a technically

outstanding product, at least one and a half

to two years ahead any competition. A technology transfer deal should with

a Korean chip manufacturer. New competitor

Option for DRAM

Option for DRAM

1. drop it all together. 2. stay on the business as a niche

player. 3. license the technology to another

company 4. invest in DRAM capability at the 1-

meg level and commit to a low-margin business.

Option for DRAM

We have been trying to find a clever way

to stay in this business without betting

everything we have, but maybe there

is none.