INTEL

Updated Feb 7, 2002
 
Years Dec
2001		 Dec
2000		 Dec
99		 Dec
98		 Dec
97		 Dec
96		 Dec
95		 97-01 5-yr
Annual Growth
Revenues (Bn US$) 26.5 33.7 29.4 26.3 25.0 20.9 16.2
Revenues Growth % -21 15 12 5 20 29 10
Net Income (Bn US$) 3.6 12.1 8.1 6.1 6.9 5.2 3.6
Earning Growth % -70 49 33 -12 33 44 12
Investment Income (Bn US$) -0.4 3.8 0.9
Special Charges (Bn US$) -2.5
Net Profit Margin % 13 36 28 23 28 25 22
Gross Margin % 49 62 60 54 60 56 52
EPS 0.52 1.73 1.17 0.87 0.97 0.73 0.51
Return on Equity % 10 32
Debt / Equity
Cash Flow / Debt
R & D (Bn US$) 3.8 3.9 3.1 2.5 2.3 1.8 1.3
Operating Income (Bn US$) 4.79 12.1 10.6 8.4 9.9 7.6 5.3
Operating Income Growth % -60 14 26 -15 30 43 6
Operating Margin % 16 31 33 32 39 38 32
(Earning, Operating Income & EPS are excluding acquisition related costs)
Market Cap.:
Cash & Short Term Investments:    10.3        (Bn US$)     (Dec 31, 2001)
Total Assets:                                     44.4
Long Term Debt:                                1.0
Total Liabilities:                                  8.6
Shareholders Equity:                         35.8
Price:                   $32.92      (Feb 6, 2002)
P/E:                     34             (based on EPS $0.97, which is the average EPS of the last 2 years and the consensus estimate of $0.68 for 2002.)

Products
 

Product
Segments		 2001(Bn $) % of Total % Change 2000
(Bn $)		 % of Total % Change 1999
(Bn $)		 % of Total % Change
Architecture:
Revenues 21 79% -23% 27 81% 7% 25 86% 7%
Operating Profit 6 -54% 13 125% 14% 11 117% 22%
Communications:
Revenues 2.6 10% -26% 3.5 10% 46% 2.4 8%
Operating Profit -0.7 0.3 0.4
Wireless:
Revenues 2.2 8% -8% 2.7 8% 111% 1.3 4%
Operating Profit -0.3 0.6 -0.1
Total:
Revenues 26.5 33.7 29.4
Operating Profit 2.2 10.4 9.8

The operating loss for "All Other" segment is due to the amortization of goodwill and other acquisition related charges.

Architecture:
Microprocessors
Celeron                -    value PCs
Pentium III & 4    -    performance PCs for home and business, entry level servers
Pentium III Xeon  -    mid-range and high end servers, Intel based servers account for over 80% of the world's unit shipments.
Itanium                 -    high end servers

Wireless Communications and Computing products:
     Flash memory, low power processors and baseband chipsets for wireless devices
     XScale - a new chip architecture designed for use in a wide variety of wireless internet and networking infrastructure applications.

Networking and Communications products:
     Ethernet connectivity products, network processing components, embedded microcontrollers, computer telephony boards and optical networking

All Other:
New Business products
     e-Commerce data center services

In 7 to 10 years, Andy Groove expects to have revenues divided into 3 equal parts:
1.  Clients architecture, includes PC, cell phones & PDA
2.  Computer servers
3.  Network silicon

Is it a monopoly type business?
    For PC microprocessors, AMD has become a key competitor and is eating up Intel's market share.  AMD has 21% market share in early 2001 and is aiming to achieve 30% by the end of 2001.
    For value segment, Intel offers Celeron processors.  In the performance level, Intel's Pentium III and 4 is still dominating the market.  AMD has a Pentium III rival called Athlon.
    For notebook computers, AMD has developed Athlon 4 to compete with Intel's mobile Pentium III.  AMD's price is much cheaper.
    For computer servers, Intel based servers account for more than 80% of the world's server unit shipments. (IDC, Jan 2001)  Intel's Pentium III Xeon processor is for the mid-range market.  In June 2001, Itanium processor for high end servers was introduced to the market.  It directly competes with the processors from Sun and IBM, both of which are the leading suppliers for high end servers.  In June 2001, Compaq sold its Alpha server business to Intel and will switch its server systems to Intel architecture.  Compaq is number 4 in worldwide server revenue market share, with 15%.  It was a good news for Intel because it eliminated a competitor to Itanium.
    In communication chips, the products are hard to understand.  The leading players in the market are Broadcom, Applied Micro Circuits, Vitesse and PMC-Sierra.

Is it in a great potential market which could lead to a sizable increase in sales for at least several years?  Does it have a strong demand?  How big is the market?

Does the management have a determination to continue to develop products that will further increase total sales when the growth potentials of currently attractive product lines have largely been exploited?

What makes the company different from its competitors?  How does the company sustain its competitive advantages?

How effective are the company's research and development efforts in relation to its size?

Does the company have an above average sales organization?

Does the company have worthwhile profit margin?

What is the company doing to maintain or improve profit margin?

Does the company have outstanding labor and personnel relations?

Does the company have outstanding executive relations?

Does the company have depth to its management?

How good are the company's cost analysis and accounting controls?

Does the company have a short-range or long-range outlook in regard to profits?

Will the growth of the company require sufficient equity financing so that the larger number of shares then outstanding will dilute existing shares?

Does the management talk freely when things are going well, but "clam up" when troubles and disappointments occur?

Does the company have a management of unquestionable integrity?