Accounting Audit Intel Corporation

It is important to note that Intel was a company founded on the risk/reward principle and still firmly believes in it today. In order to accurately analyze and audit the corporation in todays and future market, it is critical to under its origin. Their first commercial product was the 64-bit static random access memory (SRAM) chip, and it was moderately successful. In the early 70’s a new client of Intel from Japan, Busicom, wanted Intel to design 12 custom chips for their calculators.

Intel accepted the contract knowing that they did not have the resources or manpower to do the job. An Intel engineer had the singular idea of designing a stand alone chip that could do the work and functionality of a dozen chips. If successful this chip could be programmed to accept direct at the key board level. This meant that instructions could be programmed by software instead of the current method of burning it into hardware, therefore saving time and money. The end result of 9 months worth of work was the world’s first microprocessor, the 4004.

Intel changed history by making programmable intelligent chip (the micro processor) so cheap it could be embedded into household appliances and so powerful that people could have their very own PCs. Brilliantly assessing the market, Intel decided to pursue this microprocessor production and shift most of its resources from memory products to computer chips, although they continue to make memory products today. For the past 25 years Intel has been a leader in the design and production of microprocessors INDUSTRY, PRODUCTS, SIZE AND COMPETITION

An industry rarity, prices for products (microprocessor) tend to decrease over time. A 25% price decrease per year is about average. What is even more unique is the price per electronics function decreases from product generation to generation as more and more functions are integrated into a single structure. Inverse Market price is observed to technological advancement. Directly related, the range of special applications and niche problems for which software provide solutions also has developed exponentially.

This rapid expansion of market positions, especially those for standardized applications, has made it very difficult for major computer manufacturers and established producers of packaged software to maintain a presence in all of them. The standard platform for operation is the microprocessor. Therefore, Intel has assured itself a place at the technology table for the foreseeable future. Of the 300 assorted products listed in any the technology hardware section, more than a 99 % can be easily carried in one hand, i.

e. games, pda’s, virtual books, and are linked to the microscopic microprocessor. Industry wide, Intel is moving from “chips on a computer” to “computers on a chip,” the “Dual Core” chip. Dual-core chips boost performance. New manufacturing technologies permit more circuitry to be etched onto a slice of silicon. It allows the processor to work more efficiently, thus boosting the overall performance of PCs by providing a better job of handling multiple tasks.

Intel President and COO Paul Otellini stated, “By 2006, 40 percent of our desktop chips, 70 percent of notebook chips and 85 percent of server chips will all be dual-core, “(Samara, 2004) The deployment of multi-core processors across the Intel’s key product lines is central to the company’s focus. Clearly all future Intel product design will be based around multi-core technology. Common sight for chain stores with computers boxes bearing the familiar “Intel Inside” logo, however key competitor AMD claims Intel forced its way into retail outlets using unfair practices.

Legal documents accuse Intel of systematically perverting the market by bribing and threatening the makers of personal computers and those who sell them in addition to violations of American, Japanese, and European competition laws. More of a real competitive issue for Intel could be from less than formidable rival Cyrix Corp. on the product front line. Cyrix Corp. still attempts to produce a microprocessor in hopes of equaling performance rivaling or beating several of Intel’s chips at a far lower retail price.

AMD and other Intel competitors have continued to survive, despite the turbulent conditions with investors and market share of the past several years. AMD, along with smaller Intel x86 competitors, Samsung Electronics Co. , Ltd. , Renesas Technology Corp. , VIA, Transmeta to mention a few, continue to maintain a limted market share, though risky at best for their clients and investors. The future is a constant uncertainty and Intel makes a very formidable foe for any competitor seeking to enter or remain the industry.