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					                                                    Intel Corporation


                                                                  Company Profile

                                                           Publication Date: 4 Nov 2010




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Intel Corporation




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Intel Corporation
TABLE OF CONTENTS




TABLE OF CONTENTS

Company Overview..............................................................................................4
Key Facts...............................................................................................................4
SWOT Analysis.....................................................................................................5




Intel Corporation                                                                                               Page 3
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Intel Corporation
Company Overview




COMPANY OVERVIEW

Intel (or “the company”) is a prominent semiconductor chip making company. The company develops
advanced integrated digital technology products, primarily integrated circuits, for computing and
communications industries. Intel primarily operates in the Taiwan, China (including Hong Kong), and
the US. It is headquartered in Santa Clara, California and employs 79,800 people.

The company recorded revenues of $35,127 million during the financial year ended December 2009
(FY2009), a decrease of 6.5% over 2008. The operating profit of the company was $5,711 million
in FY2009, a decrease of 36.2% over 2008. Its net profit was $4,369 million in FY2009, a decrease
of 17.4% over 2008.


KEY FACTS


Head Office            Intel Corporation
                       2200 Mission College Boulevard
                       Santa Clara
                       California 95054 1549
                       USA
Phone                  1 408 765 8080
Fax                    1 408 765 9904
Web Address            http://www.intel.com
Revenue / turnover 35,127.0
(USD Mn)
Financial Year End     December
Employees              79,800
NASDAQ Ticker          INTC




Intel Corporation                                                                          Page 4
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SWOT Analysis




SWOT ANALYSIS

Intel (or “the company”) is a prominent semiconductor chip making company. The company develops
advanced integrated digital technology products, primarily integrated circuits, for computing and
communications industries. Intel’s strong market position and brand image enhances its investor
confidence. However, its issues with various regulatory commissions will adversely impact the
company's operations and investor confidence.


 Strengths                                     Weaknesses

 Strong market position                        Customer concentration
 Strategic alliances and partnerships
 Significant research and development
 capabilities
 Broad portfolio of microprocessors

 Opportunities                                 Threats

 Proposed acquisitions to broaden the          Issues with regulatory commissions
 portfolio                                     Security related issues
 Growth of telehealth and home health          Increasing competition
 monitoring market
 Positive outlook for the semiconductor
 industry
 Growing PC market
 Increasing demand for cloud computing
 infrastructure


Strengths


Strong market position

Intel is the world's largest semiconductor chip maker based on revenues, developing integrated
digital technology platforms for the computing and communications industries. The company has a
strong position in the markets it serves. In 2009, Intel led the semiconductor industry for the 18th
consecutive year, with a market share of approximately 14% in the semiconductor market while
Samsung Electronics, the second largest vendor, has a market share of approximately 8%.

The company also maintained its top share in the global microprocessor revenues. According to the
industry sources, as of Q2 2010, Intel accounted for 80.4% of global microprocessor revenue,




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SWOT Analysis



compared to 80.7% share in Q2 2009. Also, in the global microprocessor market, the company was
way ahead of its major competitor, AMD, which had a market share of 11.5% as of Q2 2010.

Intel offers platforms that incorporate various components designed and configured to work together
to provide an optimized user computing solution compared to components that are used separately.
This platform strategy provided the company with a competitive advantage over its peers and enabled
it to remain top in the semiconductor industry.

In addition, the company managed a lower decline in its revenues compared to the semiconductor
industry. Intel's revenues declined by 6.5% in FY2009, compared to 2008. Whereas, the
semiconductor industry reported a revenue decline of 12% in 2009, over the previous year.

Moreover, the company has strong brand recognition. The business week's Interbrand Best Global
Brands 2010 has ranked Intel at the seventh place with a brand value of $32,015 million, an increase
of 4% over the previous year. Intel’s strong market position and brand image enhances its investor
confidence.

Strategic alliances and partnerships

The company has strategic alliances and partnerships with various prominent technology players.
Intel has a broad base of partners to launch new services, reach more customers, and improve the
expertise in niche areas. The company has partnerships with major players including Asustek
Computer, Comstar, Cisco, Fujitsu, IBM, Microsoft, Micron Technology, Sun Microsystems, Sprint,
Verizon, and Yahoo!. Based on these joint efforts the company launched various significant products.
For instance, during 2008, Intel and Micron Technology launched a high speed NAND flash memory
technology.

In addition, the company entered into various new alliances and collaborations to launch new products
and to reach more customer base. During 2009, Intel collaborated with LG Electronics for mobile
internet devices (MIDs) based on Intel's next generation MID hardware platform and Linux based
Moblin v2.0 software platform. The company also formed a long-term relationship with Nokia to
develop a new class of Intel Architecture-based mobile computing device and chipset architectures
which will combine the performance of computers with high-bandwidth mobile broadband
communications and ubiquitous internet connectivity.

Furthermore, in September 2009, Intel and AT&T collaborated to strengthen remote PC support for
small and midsize businesses. The company and NEC agreed to jointly develop high performance
computing (HPC) system technologies that extend the boundaries of supercomputing performance
in October 2009. In February 2010, Intel and Nokia merged their Moblin and Maemo software
platforms to create MeeGo, a unified Linux-based platform that runs on multiple hardware platforms
across a range of computing devices, including pocketable mobile computers, netbooks, tablets,
mediaphones, connected TVs and in-vehicle infotainment systems.

The company's strategic collaborations with major global companies enable it to expand its customer
base and product portfolio, and acts as a competitive advantage.



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SWOT Analysis



Significant research and development capabilities

Intel has strong research and development (R&D) capabilities.The company has invested a significant
amount on product development. The company reported the R&D expenses of $5.7 billion, $5.7
billion, and $5.8 billion during FY2009, 2008 and 2007, respectively. The company's R&D efforts
focuses on advanced computing technologies, developing new microarchitectures, advancing its
silicon manufacturing process technology, delivering the next generation of microprocessors and
chipsets, improving the company’s platform initiatives, and developing software solutions and tools
to support its technologies. In addition, Intel is making significant R&D investments in areas such
as SoCs to enable growth in areas such as handhelds (including MIDs and smartphones), embedded
applications, and consumer electronics. In addition, the company continues to make significant
investments in graphics and wireless technologies. As a result of these, Intel has introduced several
successful products and advanced technologies.

In September 2009, the company introduced the Atom processor CE4100, the newest SoC in a
family of media processors designed to bring internet content and services to digital TVs, DVD
players and advanced set-top boxes. Intel launched Intel Reader, a mobile handheld device which
transforms printed text to spoken word, in November 2009. The company demonstrated an
experimental, 48-core Intel processor, or "single-chip cloud computer", which can change many of
the approaches used in designs for laptops, PCs and servers in December 2009. In the same month,
it also launched new Intel Atom processors that feature integrated graphics built directly into the
CPU, enabling improved performance and smaller, more energy-efficient designs in a new generation
of netbooks and Atom-based entry level desktop PCs.

Intel unveiled its 2010 Intel Core vPro processor family to meet the needs of businesses of all sizes
for PCs with greater, flexible performance, theft prevention and cost savings in a rapidly changing
business computing environment in February 2010. Subsequently, the company introduced the
Itanium processor 9300 series, previously codenamed "Tukwila," which provides more than double
the performance of its predecessor, increased scalability and more reliability features to the Itanium
platform.

In addition, in October 2010, Intel announced plans to invest between $6 billion and $8 billion on
future generations of manufacturing technology in its American facilities. The company intends to
fund deployment of 22 nm manufacturing process across several existing US factories, along with
construction of a new development fabrication plant in Oregon.

Significant focus on R&D serves as an edge to the company, providing it with new and innovative
products.

Broad portfolio of microprocessors

The company offers a broad portfolio of microprocessors. Intel through its PC client group (PCCG)
provides microprocessors and related chipsets designed for the notebook, netbook, and desktop
market segments. It also offers microprocessors through its data center group (DCG) for data center
and cloud computing environments. The company provides microprocessors for notebooks at a



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SWOT Analysis



variety of price and performance points, from the Intel Core i7 processor Extreme Edition, a quad-core
processor based on its latest generation Intel Core microarchitecture designed for processor-intensive
tasks in demanding multitasking environments, to the Intel Celeron processor, designed for basic
computing needs. In addition, the company also offers the Intel Atom processor, designed for
netbooks.

Its current notebook and netbook microprocessor offerings include Core i7 processor Extreme Edition,
Core2 Duo mobile processor, Core i7 mobile processor, Core2 Solo processor, Core i5 mobile
processor, Celeron D processor, Core i3 mobile processor, Celeron M processor, Core Extreme
mobile processor, Celeron processor, Core Quad mobile processor, and Atom processor. Intel
provides these processors in various packaging options, including ultra-low-voltage processors
designed for ultra-thin laptop computers, giving the customers flexibility for a range of system designs
for notebook PCs. The company also offers processor technologies designed to provide performance
with improved multitasking; and power-saving features to improve battery life, wireless network
connectivity, boot times, and to enable smaller form factors. The Intel CoreTM i5 vPro processor
and the Intel Core i7 vPro processor are designed to provide business notebook PCs with increased
security, manageability, upgradeability, and energy-efficient performance.

Similarly, Intel provides desktop microprocessors at a variety of price and performance points, from
the high-end Intel Core i7 processor Extreme Edition to the Intel Celeron processor and Intel Atom
processor, designed for low-power and affordable internet-focused devices. Also, the company offers
processor technologies based on its microprocessors, chipsets, and motherboard products that are
optimized for the desktop market segment. For business desktop PCs, Intel provides Core 2 Duo
processor with vPro technology, the Core 2 Quad processor with vPro technology, the Core i5 vPro
processor, and the Core i7 vPro processor.

In addition, microprocessors continued to be the main source of revenue for the company. For
instance, the revenue from the sale of microprocessors within the PCCG segment represented 57%,
57%, and 55% of its total revenue in FY2009, 2008, and 2007, respectively. Also, the revenue from
the sale of microprocessors within the DCG segment represented 15%, 14%, and 13% of the
company’s total revenue in FY2009, 2008 and 2007, respectively.

Broad portfolio of microprocessors enables the company to effectively cater to the diverse needs of
its customers and also helps it in maintaining top place in the global microprocessor market.

Weaknesses


Customer concentration

Intel is dependent on few customers for significant proportion of its revenues. The company's top
two largest customers, Hewlett-Packard (HP) and Dell, accounted for approximately 38% of its
revenues in FY2009 and 2008. HP contributed 21% and 20% of Intel’s total revenues in FY2009




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SWOT Analysis



and 2008, respectively. Similarly, in FY2009 and 2008, Dell accounted for approximately 17% and
18% of the company's total revenues, respectively.

High dependence on a few customers reduces the bargaining power of the company and increases
its business risk.

Opportunities


Proposed acquisitions to broaden the portfolio

Intel entered into agreements to acquire different companies in recent times in a move which signifies
the company’s approach to expand beyond its traditional PC and server markets. In August 2010,
Intel entered into a definitive agreement to acquire McAfee for approximately $7.7 billion. The deal
is expected to close after McAfee’s shareholder approval, regulatory clearances and other customary
conditions specified in the agreement. After the completion of the acquisition, McAfee will operate
as a wholly-owned subsidiary of Intel, reporting into its software and services group. The acquisition
allows Intel to address the issue of security, which continues to be a growing problem for desktops,
laptops, and smartphones.

McAfee has a suite of software-related security solutions, including end-point and networking products
and services that helps in protecting internet-connected devices and networks from malicious content,
phony requests and unsecured transactions and communications. McAfee’s products include McAfee
Total Protection, McAfee Antivirus, McAfee Internet Security, McAfee Firewall, McAfee IPS as well
as an expanding line of products targeting mobile devices such as smartphones. The acquisition of
McAfee enables Intel to offer hardware combined with security making its platforms to run around
any chip supporting an operating system and antivirus and anti-spam software in addition.

In addition, in August 2010, Intel signed an agreement to purchase Infineon's Wireless Solutions
Business (WLS) in a cash transaction valued at approximately $1.4 billion. The acquisition expands
Intel's current Wi-Fi and 4G WiMAX offerings to include Infineon's 3G capabilities and supports Intel's
plans to accelerate LTE.The acquired technology will be used in Intel Core processor-based laptops,
and a range of Intel Atom processor-based devices, including smartphones, netbooks, tablets and
embedded computers. This acquisition further strengthens Intel’s internet connectivity strategy and
enables it offer a portfolio of products that spans across a range of wireless options from Wi-Fi and
3G, to WiMAX and LTE.

Proposed acquisitions will broaden Intel’s portfolio of offerings and enhances its competitive position
in the market.

Growth of telehealth and home health monitoring market




Intel Corporation                                                                              Page 9
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SWOT Analysis



The market for telehealth and home health monitoring is expected to grow in the coming years.
According to the industry sources, the market for telehealth and home health monitoring in the US
and Europe is forecast to grow from $3 billion in 2009 to $7.7 billion by 2012.

In recent times, Intel has increased its focus in this area. The company’s digital health group offers
technology-enabled products that are designed to reduce healthcare costs and connect people and
information to improve patient care and safety. In 2009, Intel also formed an alliance with GE to
market and develop home based health technologies. As a part of agreement, GE Healthcare sells
and markets the Intel Health Guide, a remote patient monitoring solution. In January 2010, GE
Healthcare and Intel expanded Intel Health Guide marketing agreement to the UK. In March 2010,
the company made available its Health Guide, in Australia. Further, in June 2010, Intel made available
its Health Guide in Italy through an expanded marketing agreement with GE Healthcare.

In addition, Intel, GE Healthcare, and Mayo Clinic partnered to explore new models of health care
delivery. Moreover, Intel and GE signed an agreement to form a 50/50 joint venture to create a new
healthcare company focused on telehealth and independent living in August 2010.

Intel’s increased focus on telehealth and home health area will enable it to benefit from the growing
market.

Positive outlook for the semiconductor industry

The semiconductor industry has been forecast to report growth in the coming years. After the downturn
for the consecutive years in 2008 and 2009, the semiconductor industry is expected to recover and
grow steadily in future. According to the industry sources, the worldwide semiconductor capital
spending is forecast to double in 2010, compared to the previous year. In addition, the worldwide
semiconductor market is expected to grow by 27% in 2010 over 2009. Further, the global
semiconductor industry is forecast to report continued growth till 2014.

Being one of the leading providers of semiconductor products, Intel is highly dependent on the
semiconductor market. The growth in the semiconductor industry resulted in the increased demand
for the company's products and increased its revenues in 2010. Intel reported revenues of $32,166
million for the first nine months of FY2010, compared to $24,558 million over the same period in the
previous year, representing an increase of 31%.

Positive outlook for the semiconductor industry will enhance its top-line growth in the coming years.

Growing PC market

The worldwide PC market is forecast to record strong growth in coming years. In 2009, the desktop
PC shipments reported a decline in 2009, while the mobile PCs shipments, which include sales of
laptops, notebooks, netbooks and tablet PCs, grew by more than 15% over 2008. The growth was
mainly driven by consumer market demand. Further, the overall PC market is forecast to record a
CAGR of 13% during 2009-14, while the mobile PC market is forecast to record a CAGR of 19%




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SWOT Analysis



during the same period. The growth in this market is expected to be driven by demand from both
developed and developing nations.

Intel offers products including microprocessors and related chipsets designed for the notebook and
netbook market segments. Moreover, the company's Atom processor for these segments is very
prominent with growing demand. Growing PC market will contribute to steady revenue flows for the
company in near term.

Increasing demand for cloud computing infrastructure

The market demand for cloud computing infrastructure is expected to grow in the coming years. The
increasing use of cloud computing will create a need for greater server infrastructure, including server
products optimized for energy-efficient performance and virtualization. Also, according to industry
sources, it is estimated that sales of cloud services is expected to grow at a compounded annual
growth rate (CAGR) of 23% during the period 2010–14. In addition, the revenue from public IT cloud
services is forecast to grow at a CAGR of 30% during 2009–14.

Intel through its portfolio of offerings supporting cloud computing infrastructure is well positioned to
benefit from this growing market. Its data center group (DCG) offers products that are incorporated
into servers, storage, workstations, and other products that make up the infrastructure for data center
and cloud computing environments. DCG’s products include microprocessors and related chipsets,
and motherboards and wired connectivity devices. Furthermore, the company has increased its
focus on investing in various cloud computing companies. For instance, in September 2010, Intel
Capital, the company’s global investing arm, invested over $30 million in companies, including
Adaptive Computing, a provider of Moab unified automation intelligence technology and Joyent, a
provider of cloud computing infrastructure, among others.

The company’s focus on the emerging technology will enable it to capitalize on the growing demand.

Threats


Issues with regulatory commissions

Intel is facing various issues including antitrust inquires with the regulatory commissions. In 2001,
the European Commission (EC) commenced an investigation regarding claims by the other players
of the industry, alleging that the company is involved in unfair business practices. The EC issued a
Statement of Objections (SO) in 2007 alleging that certain Intel's marketing and pricing practices
amounted to an abuse of a dominant position that infringed European law and held a hearing on
that SO in 2008. Also, in 2008, the EC issued a Supplemental SO in 2008.

In May 2009, the EC issued a decision finding that Intel had violated Article 82 of the EC Treaty and
Article 54 of the European Economic Area Agreement. As a result, the EC imposed a fine of
approximately $1.5 billion on Intel, which it paid during the third quarter of 2009. Also, Intel disagreed




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SWOT Analysis



with the EC’s decision, and it appealed the decision to the General Court (formerly the Court of First
Instance).

In addition, Intel is also facing inquiries from the Korea Fair Trade Commission (KFTC). KFTC
decided that the company violated Korean antitrust law and imposed a fine of approximately $20
million. However, the company appealed the KFTC's decision by filing a lawsuit in the Seoul High
Court and lawsuit is pending.

Moreover, in November 2009, the State of New York filed a lawsuit against Intel in the US District
Court for the District of Delaware. The lawsuit alleged that Intel violated federal antitrust laws; the
New York Donnelly Act, which prohibits contracts or agreements to monopolize; and the New York
Executive Law, which proscribes underlying violations of federal and state antitrust laws.

Furthermore, in December 2009, the US Federal Trade Commission (FTC) issued an administrative
complaint alleging that Intel had violated Section 5 of the FTC Act by engaging in unfair methods of
competition and unfair acts or practices in markets for CPUs and GPUs. In August 2010, Intel and
the FTC reached a tentative settlement over this issue.

Such antitrust proven decisions will adversely affect the company's operations and investor
confidence.

Security related issues

The company is subject to security related issues, including the theft or misuse of intellectual property.
It regularly faces attempts by others to gain unauthorized access through the internet to the company’s
information technology systems by various forms such as masquerading as authorized users or
introduction of harmful software. These attempts if successful can harm its products, or end users
and in turn, the company.

In January 2010, Intel reported one such sophisticated incident around the same time as the recent
security incident reported by Google. The company seeks to detect and investigate these security
incidents and to prevent their recurrence. The theft and/or unauthorized use or publication of Intel’s
trade secrets and other confidential business information as a result of such an incident can affect
its competitive position.

Future occurrence of such security failure incidents may harm the company’s reputation.

Increasing competition

Intel operates in a highly competitive and technologically evolving semiconductor industry. The
company competes with a number of major domestic and international suppliers of integrated circuits
and related applications in its target markets. It also competes with suppliers of system-level and
motherboard-level solutions incorporating integrated circuits that are proprietary or sourced from
manufacturers other than Intel.




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Intel Corporation
SWOT Analysis



The company's major competitor for its microprocessors include Advanced Micro Devices. Intel also
faces competition from companies offering rival architecture designs, such as Cell Broadband Engine
Architecture developed jointly by IBM, Sony, and Toshiba; Power Architecture offered by IBM; ARM
architecture developed by ARM Limited; and Scalable Processor Architecture (SPARC) offered by
Sun Microsystems, a subsidiary of Oracle. In addition, NVIDIA is seeking to position its graphics
processors to compete with microprocessors, by shifting some of a microprocessor’s workload to
its graphics processor. While AMD has been Intel’s primary competitor in the market segments for
microprocessors used in notebooks, desktops, and servers; QUALCOMM and other companies
using ARM-based designs are the company’s major competitors in the growing market segment for
microprocessors used in handhelds, including smartphones and MIDs.

Intel’s chipsets compete with chipsets produced by companies such as AMD (including chipsets
marketed under the ATI Technologies brand), Broadcom, NVIDIA, Silicon Integrated Systems, and
VIA. The company’s WiFi and WiMAX products currently compete with products manufactured by
Atheros Communications, Broadcom, QUALCOMM, and other smaller companies.

Increasing competition may result in declining average selling prices for the company's products
and will affect its top line growth and margins in coming years.




Intel Corporation                                                                         Page 13
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