Intel : Managing Working Capital (Page 2)

Abstract

Intel is the undisputed leader in the microprocessor industry with about a 90% market share. Since 1968 when it was founded, Intel has launched many ground-breaking products. Many analysts attribute Intel''s success to its technology, innovation and management. It has also attempted to become a disciplined company that maximises operational efficiency, one important dimension of which is working capital management. The case outlines various aspects of working capital management at Intel.

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Corporate Background contd...

In 1971, Intel introduced the world's first microprocessor , the 4004, a development that marked a turning point in the PC industry. Also that year, Intel introduced the world's first erasable programmable memory, the EPROM.

During 1985 and 1986, Grove, who succeeded Noyce as CEO, closed seven factories, abandoned several businesses, and cut head count by one-third. Intel, however, maintained its commitment to research activities. R&D and capital expenditures together accounted for 30 percent of revenues in 1986. To recover the heavy investments, Grove focused on the development of proprietary PC chips. Intel licensed technology to competitors like Advanced Micro Devices (AMD) to make their own versions of the 80286 chip. When AMD had captured 52 percent of that market by 1990, Intel made attempts to protect the technology of its highly successful 386 (1985) and 486 (1989) chips. This prompted AMD to sue Intel for breach of contract. Later, the two companies patched up and settled several court cases. AMD got the micro code license and Intel was awarded $58 mn in damages. .....

        Case Code   FINA010
   Case Length    8 Pages
              Period    1968 - 2003
 Organization     Intel
        Pub Date     2005
Teaching Note    Not Available
     Countries    USA
      Industry    Semi Conductors

Issues

Intel, Finance, Managing Working Capital

Intel; Working capital; Microprocessor; Balance sheet; Advanced micro devices (AMD); Finance statement; Finance; Working capital management; Intel Communication Group; Centrino; Profit and loss statement; Operational efficiency; Innovation; Technology

Please note:

This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.