Intel is one of the leading companies in the semiconductor industry. Its major line of products includes, but is not limited to, processors, motherboards, and onboard graphics processing units. Intel Corporation is a publicly traded company founded in 1968. Its world headquarters is located in Santa Clara, California, United States. It started as a local manufacturer of basic semiconductor products, particularly interface cards. However, as years went by, and as the diversity and demand for semiconductor products inevitably rose, the management decided to expand their operations to other countries and enter the international market. Now, the company caters to almost every part of the world where there is a market for computers and semiconductor products. Also, the diversity of its products has increased tremendously. It now offers the most advanced semiconductor products such as motherboard chipsets, integrated circuits, integrated graphic chips, flash memories, network interface controllers, microprocessors for desktop computers and notebooks, and other devices that have something to do with computing and communications electronics.
Competition—a Major Driving Force in the Semiconductor Industry
There are several factors that could inspire or drive a company to work hard, not only for their customers, but for survival. Well, for most companies, regardless of the industry they are in, customer satisfaction is essential for company survival. Intel Corporation just decided to treat these two driving forces independently because according to them, survival is not the only means to survive. Winning a greater deal of share in the market could spell the difference between a surviving and flourishing semiconductor company and one that is on the brink of bankruptcy. Cutthroat competition is so common in this industry. In fact, there are already a lot of companies who suffered from the consequences of offering easily beatable products in the market. Examples of such companies include Motorola, International Business Machines (aka, IBM), etc. Intel Corporation’s major competitor in the industry now is Advanced Micro Devices or more popularly known as AMD. Although the market for semiconductor products is large enough to accommodate two giant companies such as these two, the advent for larger revenues and profits is still ongoing and so far, Intel appears to be the more dominant one. Many research and market analysts believe that the reason behind Intel’s domination of the semiconductor industry is its development and marketing strategy which they call the Intel Tick Tock model.
Intel Tick Tock Model of Research and Development
Goal setting is one of the most important aspects of product research and development. A sufficiently-funded R&D project may turn out to be as crappy as an extremely underfunded one if it would be launched without a clear and achievable goal in mind. This might be the idea that ran into Intel Corporation’s mind when they first introduced their Tick Tock model of R&D.
Basically, Intel’s Tick Tock is just a firm development plan that they follow whenever they are about to introduce a new product. In the semiconductor industry, the updated-ness of the architecture could be a key indicator of whether the product will be patronized by customers or not. Manufacturers in this industry usually have two options that they can consider if their goal is to improve the competitiveness of their products in the market. They can either create a new and more advanced architecture or focus all of their R&D efforts towards the improvement of the current architecture. Unfortunately for AMD, they chose to only improve on a single architecture and not develop new ones, a move that Intel considers to be disastrous. With Intel’s Tick Tock, the goal is to incorporate the introduction of new architectures and the improvement of current available architectures in the market. A Tick corresponds to the improvement of certain architecture while a Tock corresponds to the introduction of a new architecture. This way, the company could make sure that every product line is fully supported and updated. Every year, say for example 2012, Intel computer users anticipate at least 1 tick and 1 tock.
Intel Corporation’s Sandy Bridge line of processors for example, was a Tock that was introduced in 2012. It is the successor of the Nehalem line of processors. It is basically a new architecture that’s why it is called a Tock. Later that year, about 5-7 months after the release of Sandy Bridge, Intel released a new line of processors under the codename Ivy Bridge, which is a Tick, because it is basically an improved version of the Sandy Bridge processors.
This innovation strategy is unique to Intel Corporation. This is undeniably the major reason why many notebook and desktop computer mainstream users and enthusiasts prefer to buy Intel over other products. With the Tick Tock model of innovation, Intel provides its stakeholders a clear picture of how staying loyal with the company’s products would be like in the future. It can also be seen as a form of assurance to current and prospective customers that the company will always do its best and strive hard to provide nothing but the best and also a continuously improving lineup of semiconductor products.
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Intel Newsroom. “Intel News Stories.” Intel Newsroom (2012).