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June 7, 1990

INTEL SEES RAPID SWITCH TO 32-BIT PERSONAL COMPUTERS FUELLED BY MICROSOFT WINDOWS 3.0

By CBR Staff Writer

Intel Corp has announced the second phase of its three-phase 10 year Irish development programme launched in October 1989 (CI No 1,276). It is to build a $300m chip manufacturing facility near Dublin to accompany its systems manufacturing facility in Leixlip, County Kildare. At the announcement, Bernard Giroud, president of Intel Europe, was at pains to explain how important the European market is to his company: from 1986 to 1988 Intel doubled its sales in Europe to reach the $700m mark and although turnover in Europe was flat last year, the forecast for the rest of this year is for substantial growth. Indeed, Intel believes that the European operation will be a billion dollar business within two years. This belief is based upon the speed with which Europe is taking up the 32-bit personal computer. Intel reckons that 75% of all IBM personal computers and compatibles shipped to Europe will be 32-bit in 1992. One factor in this growth is release of Microsoft’s Windows 3.0 which Intel sees as the software catalyst for the 32-bit market. (OS/2 was dismissed as irrelevant). Production for the European market is ramping up much faster than anyone expected, and this was the driving factor behind Intel bringing forward the second phase of its Irish manufacturing venture. The first phase of the programme, the system plant in Leixlip is now half finished, with surface mount technology currently being installed – the first European-made Intel board will ship in July. This plant will be in full production by the end of this year. The newly announced 35,000 square foot multi-module wafer fabrication facility is planned to start production in January 1993. To begin with it will be a 0.8 micron manufacturing facility producing the 80486 processor and support circuits. With equipment upgrades, the plant will then move to 0.5 micron technology, then to 0.35 micron, reaching 0.25 micron capability with graphic dimension, and so it is planned to exist beyond the turn of the century. The wafer fab will be a Class-1 clean room and will be vibration free for optical lithography. Craig Barrett, Intel’s executive vice president says, bullishly, that optical lithography will get the company to the 0.35 micron stage and may even take it to 0.25 micron technology. He added that there may be no need for X-ray lithography at all. Of synchrotrons (see alongside) he said he had seen IBM’s neat little gadget, thought it very expensive, and said IBM was the only real player in the X-ray lithography field.

Flash EPROM

He may well be surprised. The Irish wafer fab will be a mirror image of Intel’s Fab 9.2 in Albuquerque and all its equipment will be imported from the US and Japan. It will be developed to be flexible so that it can also handle flash EPROM technology. The 80860 and 80960CX products will probably go through the Irish plant as well. In fact it will be capable of handling any million transistor part on dies of one square centimetre or less. It will, however, follow international demands, since it will supply a wider market than Europe. Clearly defensive about Intel’s billion dollar systems division, Barrett said that the majority of its business lay in service and add-on boards. Furthermore, he said it would be moving further into the communications business where its 80386 microcontrollers are in strong demand for mobile radio and telephones. He also claimed that the European automotive industry’s drive into automatic braking systems was steered by Intel’s microcontrollers. As for the future Intel is forecasting price declines on processors of 5% per quarter for the next few years. In the longer term, it sees the decline in the US market being picked up by the Taiwanese and Korean markets. It believes that the Japanese and European markets will remain stable, respectively contributing 10% and 25% of Intel’s revenues.

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