Main Intel Competitors in Industry - Case Study Example

Everyone knows just how dominant Intel is in the microchip and microprocessor business. But since Paul Otellini began his tenure as CEO in 2006, Intel has rapidly diversified its business approach. According to Mcgregor (2007), “The new Intel is changing the competitive landscape with its expansion into new markets.  Thus, entry into these industries has brought new competition for the silicon giant from companies such as ARM and VIA in the low-power form factors and consumer electronics space, while more traditional competitors such as AMD and IBM adopt a flanking stance to these new strategies. ( p. 17)  

AMD has actually been trying numerous strategies to try and catch up with the dominance of Intel.  In what some industry analysts viewed as a ploy to increase their share price, AMD filed an antitrust suit against Intel. Business Week (2005) states that “the company has filed sealed court documents alleging that Intel Corp. used unfair business practices and scare tactics to stop AMD from winning microprocessor contracts with major computer makers” (p. 9) Intel would later sharply refute these allegations, arguing that its rival was the victim of its lapses in judgment.

In a nutshell, AMD is the only major competitor in the processor market.  Competitors in PC chipsets include VIA Technologies, SiS, ATI, and Nvidia, and its competitors in flash memory include Spansion, Samsung, and Hynix.

2. Products that use the Intel Chip?

The world’s largest semiconductor company is the inventor of the x86 series of microprocessors, which is the processor found in most of the world’s computers. It is responsible for much of the growth in the personal computer industry and is the undisputed leader in producing microprocessor chips. In the 1980’s at the onset of the personal computer revolution, Intel supplied chips to both IBM and Compaq, setting up the stage for a competitive market for PC-compatible systems. This set up Intel as a key component supplier in the rapidly emerging market.  Today, the biggest names in the market make use of the Core2Duo and Intel Centrino processors in what serves as the closest thing to a market standard. Among many others, heavyweights such as Dell and IBM use Intel processors in all of their desktop and notebook pc models. Even former competitors have started to join the fray, as the New York Times (2007) announced that “Sun Microsystems and Intel,  two technology companies that have rarely found themselves on the same side of the aisle, announced a deal on Monday for Sun to use Intel chips in some of its computer servers, a setback for rival chip maker Advanced Micro Devices” ( p. 8) However, the biggest coup for Intel was when Apple CEO Steve Jobs announced that Apple would be switching from its PowerPC framework into the Intelx86 structure, stating that “Our goal is to provide our customers with the best personal computers in the world, and looking ahead Intel has the strongest roadmap so far” (Apple Official Press Release, June 2005) This development all the more showcased the long-standing market dominance that Intel has had on the industry.

3. Global Market, specifically Asia (who do they sell it to)?

Outside of North America, the Asia –Pacific region accounts for a big chunk of their global market. Since 2001 leading up to 2003, sales in the region have been on a continuous upward trend, growing from $8,308 million in 2001 to $12,161 in 2003. In 2003, Taiwan, China, and Japan were the biggest individual consumers of these chips in the Asian market, underscoring the tremendous economic viability of these captive global markets. In contrast, the North American market has been on a downward spiral since 2001, which all the more highlights the need to focus on the very robust Asian market if any form of long-term profit sustainability is to be achieved.