Why was Intel initially successful in DRAMs - Assignment Example

Intel’s Success in DRAM In 1966, Dr. Robert H. Dennard invented the first DRAM chip (Bellis). This allowed Intel to break into a new market, one which had not been established before. Along with releasing a newly –found technology, the newly created Intel was able to establish a reputation among the competition. Dennard claims he went home and formulated the basic idea for DRAM within a few hours, as Mary Bellis explains, “Dennard and his team were working on early field-effect transistors and integrated circuits, and his attention to memory chips came from seeing another team's research with thin-film magnetic memory.

Dennard claims he went home and within a few hours had gotten the basic ideas for the creation of DRAM.” Within two years after its release, Intel would become a world leader in DRAM technologies. Intel created the Memory Systems Operation to assemble the DRAM chips to standards required for sale to OEM’s (Original Equipment Manufacturers), who then put the chips into more sophisticated machines. This operation allowed Intel to distribute their technologies to a wider area. This strategy, in conjunction with offering replacement parts for mainframe computer memories, allowed them to gain more control over the market.

Over ninety percent of Intel’s revenue was brought in by their DRAM, which was the world’s largest selling semi-conductor. Always being the first into new markets, Intel used that strategy and the fact they were the first to release DRAM to heighten sales of the chips and create the success they did ( Lazonick 148-149). Intel’s business strategy was very aggressive and they knew how to play the market to maximize profits. Part of the reason that DRAM was so successful was not only because it was a new technology, but also that is was a cheap technology to make.

Being the first to release a new product allowed Intel to have complete control of the market for DRAM. Complete control over the customer-base contributed to the distribution and rise in Intel’s DRAM. The new chip eventually become known as the “ Technology Driver”, which Intel naturally accepted and put to work, increasing profits and bettering the design. To further strengthen their lead, Intel allocated a large amount of resources to production, research, and sale (Lazonick 149). The 1103, Intel’s DRAM chip, had many design issues, which calmed researchers as they knew their technology would not be obsolete, but in 1972, Intel’s DRAM technology was the world leader and had defeated magnetic core type memory, which was invented in 1949 by Jay Forrester (Bellis).

This victory came because the design for Intel’s new memory chip introduced a single transistor and smaller capacitor. Such a design saved money and space, two things which would fuel companies to contribute to Intel’s success. It was not until the Japanese entered the DRAM business, that Intel gained its first taste of competition. Works Cited Bellis, Mary. “Inventors of the Modern Computer.” About.com Inventors: n. pag. Web. 9 Feb. 2011. . Lazonick, William. American Corporate Economy: Critical Perspectives on Business and Management.

New York: Routledge, 2002. Google Book Search. Web. 9 Feb. 2011. .