Published April, 2002

	For questions regarding information in this report, please call the Intel New Mexico EHS Department at 505-794-4907
	To have an Executive Summary of this report mailed to you, please call 505-893-3754.

Section I: Intel Environmental, Health and Safety Policy
"Intel Corporation and its subsidiaries are committed to achieving high standards of environmental quality and product safety, and to providing a safe and healthful workplace for our employees, contractors, and communities.

We will comply with all applicable regulatory requirements as a minimum and implement programs and processes to achieve greater protection where appropriate. We will work with stakeholders to develop responsible laws, regulations, and innovative programs that provide safeguards for the community, the workplace and the environment while providing flexibility to meet the needs of our business.

We seek a healthful and safe workplace, free of occupational injury and illness. We emphasize individual responsibility for safety by all employees and at all levels of management. We expect employees to report potential safety hazards and issues and be involved in implementing solutions. We will not conduct any operations or market a product without adequate safeguards. To maintain a safe work environment, employees are prohibited from possessing or using illegal drugs on Intel premises or reporting to work under the influence of illegal drugs or alcohol.

We are committed to conserving natural resources and reducing the environmental burden of waste generation and emissions to the air, water and land. Through continuous improvement methodologies we will develop environmentally compatible products and processes. We will strive to be leaders in reducing, reusing and recycling and will ensure that any wastes remaining are properly disposed of in a safe and environmentally sound manner.

We will be a responsible member of the communities in which we live and work. We will continue to expand our knowledge and understanding of the effect of our operations of safety, health and the environment. We are committed both to continuous improvement in our operations and to sharing the knowledge that we gain with our employees, customers, suppliers, and the communities in which we live and work, the scientific community, government, and industry.

We will establish and maintain appropriate controls, including periodic review, to ensure this policy is being followed."

Craig R. Barrett, Chief Executive Officer
Policy established 1991, last revised March, 1998

Section II: Introduction
Intel's corporate Environmental, Health, and Safety policy states the company's commitment to conserving natural resources and reducing the environmental burden of waste generation and emissions to the air, water, and land through continuous improvement methodologies. Intel sets lofty goals to meet these commitments and presents an annual report card outlining our performance against those goals. The information contained in this report reflects our gains in designing for the environment and our commitment to reducing, reusing, and recycling at world-class levels.

During 2002, Intel NM completed construction of the Fab 11X plant expansion as the company's first high volume manufacturing 300-millimeter plant. The Design for Environmental, Health, and Safety (DfEHS) philosophy encompasses facility design, manufacturing process development, chemical selection, natural resource utilization, and waste management as key areas for improvement. By employing DfEHS principles, Fab 11X has recorded conservation gains in emissions reductions, ultra pure water use, and water recycling.

Because of more efficient chemical and water use, the projected reductions per chip are more than 40% for volatile organic compound emissions, hazardous air pollutant emissions, and ultra pure water use. Ironically, the completion of Fab 11X construction resulted in less recyclable material which prevented Intel from meeting its 2002 goal to recycle 75% of the solid waste at the New Mexico site. However, the 70% of solid wastes we did recycle exceeded the corporate goal by 10%.

During 2002 Intel maintained compliance with the minor source air permit issued by the New Mexico Environment Department in the spring of 2000. The permit requires the most extensive monitoring and testing of any Intel permit anywhere in the world. Test results have consistently shown that emissions are well below the permitted levels and those results are submitted to the New Mexico Environment Department.

In addition to regularly scheduled stack testing on the site Intel is engaged in an update of the 1997 site-wide risk assessment. The original risk assessment conducted by a third-party evaluator determined chemical levels in soil and air are as low near Intel as anywhere else in the metroplex. The updated study will include the changes caused by the addition of Fab 11X.

Results of the updated risk assessment will be shared with the New Mexico Environment Department and the community as was done with the original study. Intel will also contribute the findings to the New Mexico Environment Department air quality task force charged with conducting an air quality study that includes all emissions sources in the surrounding area. Intel supports the New Mexico Environment Department process and is a contributing member of the task force with other business, community, and government leaders.

Section III: EHS 2002 Goals and Status
Goal: Continue water recycling and conservation to maintain fresh water use at or below historic usage levels.
Status: Met. Intel's water conservation program achieved its goal of maintaining site fresh water use within the historical range established prior to the Fab 11X expansion. Intel has committed to support the Fab 11X expansion without increasing historical fresh water demand.

Goal: Assist site contractors in their efforts to reduce their OSHA recordable injury rate by 30% in 2002.
Status: Not met. The 2002 contractor injury rate was 0.96 injuries per 200,000 hours worked, which is essentially flat to the 2001 recordable rate of 0.93 injuries per 200,000 hours worked. Although the goal was not met, this rate is much lower than the average construction recordable rate of 8.0 injuries per 200,000 hours worked. Intel will continue to work with the site contractors to reduce injuries.

Goal: Reduce OSHA recordable injuries in 2002 by 20% compared to 2001.
Status: Not met. In 2002, OSHA regulations changed the types of injuries that are classified as recordable. Without this change, the 2002 recordable injury rate would have remained essentially flat to the 2001 rate of 0.23 injuries per 200,000 hours worked. However, the 2002 recordable rate was still at a world-class safety level.

Goal: Recycle at least 75% of the chemical waste from the New Mexico site.
Status: Exceeded goal. A chemical waste recycling rate of 95% was reached in 2002. This high recycle rate is largely a result of Intel's wastes being directly reused by other companies. For example, Intel NM ships its Calcium Fluoride cake, which is a byproduct of one of the wastewater treatment systems, to a cement kiln in Colorado for direct reuse.

Goal: Recycle at least 75% of the solid waste from the New Mexico site.
Status: Not met. A solid waste recycling rate of 70% was reached in 2002. The reduction was largely due to completion of the Fab 11X facility construction in April 2002, which significantly reduced the amount of recyclable wastes generated at the site.

Goal: Make testing and environmental report submissions more readily available to the public. Status: Met. Intel has reviewed our environmental performance in public forums and met with individuals in the community and included portions in our quarterly community newsletter.

Goal: Support environmental excellence throughout New Mexico by providing mentoring through the Green Zia Environmental Excellence Program.
Status: Met. Intel developed and delivered Green Zia training and presented an overview of our environmental management systems and application for Green Zia at the Green Zia Application Training Workshop, a Green Zia Mentoring Lunch, and the Bi-National Lean and Green Conference.

Goal: Update the New Mexico Site Risk Assessment for changes made since the original assessment completed in 1997.
Status: In Progress. The update is currently underway and expected to be complete in 2003.

Goal: Provide tours and informational open houses to the public.
Status: Met. Several tours and open houses were held in 2002, including the Fab 11X grand opening, invitations extended to friends and neighbors through our employees, and requests from groups and individuals.

Section IV: EHS 2003 Goals
Goal: Continue to improve health and safety performance.

Goal: Continue to improve contractor health and safety performance.

Goal: Recycle at least 60% of the solid waste from the New Mexico site.

Goal: Recycle at least 75% of the chemical waste from the New Mexico site.

Goal: Complete update of the NM Site Risk Assessment for changes made since the original assessment was completed in 1997.

Goal: Continue water recycling and conservation to maintain fresh water use at or below historic usage levels.

Goal: Sustain ISO 14001 registration by maintaining excellent environmental management systems.

Goal: Support the New Mexico Environment Department's Corrales Air Quality Study in providing a study that is scientifically sound and appropriately focused to provide the general public with the factual information on the air quality in Corrales.

Section V: Health and Safety
Promoting a safe and healthy workplace is the basis of Intel's Environmental, Health and Safety Policy, and each year, Intel puts forth great effort to uphold this commitment to its employees. Some of these efforts included installing temperature sensors in the parking lots that warn of icy conditions, and implementing the incident and injury free (IIF) philosophy, which is a mindset that all incidents and injuries are preventable. In 2002, a large focus was placed on promoting home safety awareness. Employees received quarterly "giveaways" for their homes that included safety calendars, safety glasses, and replacement batteries for household smoke detectors.

Intel measures its safety performance according to two standards set by the Occupational Safety and Health Administration (OSHA): (1) the days away case rate, which refers to any injury or illness that requires an employee to miss a day of work or be placed on restrictive duty; and (2) the recordable injury/illness rate, which includes any work-related injury or illness requiring medical treatment. In 2002, OSHA regulations changed the classification of recordable injuries. This change increased the types of injuries that are classified as a recordable injury. Without the change, Intel NM's 2002 recordable rate would have remained essentially flat to 2001 levels, which are world-class. This new definition of recordable injuries will be used as a basis for future monitoring of Intel's performance.

In addition to providing medical treatment and monitoring to employees, Intel's Occupational Health Services deliver a wide range of services that promote the health, productivity and well-being of employees. Among these services are the on-site fitness centers, ergonomic stretching programs, and flu shots for employees. The Occupational Health staff also promotes an annual fitness challenge that encourages employees to "get fit for life." Additionally, they hosted many free classes and brown bag meetings on how to reduce foot and back fatigue, stop smoking, reduce cholesterol, improve sleeping habits, and enhance parenting skills.

In an effort to improve Occupational Health services across the corporation, the NM staff has developed an On-Call Triage support program, where they receive and respond to calls from the Santa Clara Intel site, since that site does not have round-the-clock nursing coverage. The NM nurses obtained California nursing licenses to support this program and provide medical advice over the phone. The Occupational Health group partners with site security and emergency response team personnel to assure this process runs smoothly, even though they are spread apart by over a thousand miles. This program has been very successful and in now being implemented to the Colorado Intel site as well. Intel NM's Occupational Health group also hosted the nursing supervisor from Intel Malaysia, who spent two weeks in NM and another Intel site to benchmark best known practices from Intel sites around the world.

In 2002, Intel teamed with the local nursing community through the UNM College of Nursing. Intel Occupational Health staff members promoted the nursing preceptorship program by mentoring college students during their 20-hour community health rotation, where students spend part of the day at a local nursing facility to learn about the various programs and services. The students gain experience by participating in employee assessments. Intel NM EHS staff members also developed partnerships with local area contractors in an effort to provide environmental, health, and safety guidance and assistance in developing and enhancing vendor safety programs. Staff members met with representatives from Kirtland Air Force Base to share ideas in the areas of behavioral-based safety philosophies and strategies and construction safety technologies. Additionally, EHS team members have integrated Incident Free Environment into the curriculum at Albuquerque Technical Vocational Institute's Semiconductor Technology program. Intel has furnished instructors for this program and has contributed in making environmental, health, and safety values a key aspect of the program.

Section VI: Environmental Performance
Intel's goal is to meet or exceed all environmental compliance requirements for air, water, and waste. The NM site continues to operate under the minor source air permit issued by the New Mexico Environment Department in 2000. The permit requires extensive stack testing across the site, with results submitted quarterly to the New Mexico Environment Department. The testing results have consistently shown that emissions are well below the permitted limits. The minor source permit limits Intel's site-wide emissions to less than 96.5 tons per year of Volatile Organic Compounds (VOCs), 95.7 tons per year of Oxides of Nitrogen (NOx), 94.7 tons per year of Carbon Monoxide (CO), 24 tons per year of Hazardous Air Pollutants (HAPs), and 14.2 tons per year of particulate matter. The Intel NM site continually strives to reduce the air emissions from its facility, despite production increases. Over the last several years manufacturing output has increased significantly, and at the same time the overall emissions from the facility has remained constant and well below the minor source air permit thresholds.

People who live near the Intel NM site have continued to raise questions about whether the facility poses any health or safety risks to the community. To answer these questions, Intel commissioned an update to the 1997 site wide risk assessment study by a third-party evaluator. The original assessment began in 1995, was completed in 1996, and the final report was published in 1997. The study found chemical levels in the soil and air are low near Intel and consistent with soil and air chemical levels in other parts of the Rio Grande Valley. The original risk assessment will be updated to the preserve technical integrity of the work completed five years ago by adding new chemicals used in Fab 11X and keeping the technical analysis of community health risk current. In addition, Intel will continue to openly share environmental aspects of its operations with the community. The current update will follow the same methodology as the original assessment (which was conducted in accordance with EPA and OSHA regulations and guidance) and is expected to be complete in 2003. The New Mexico Environment Department is also conducting an air quality study in Corrales that is following a methodology similar to that used for Intel's risk assessment. The New Mexico Environment Department study will include all emissions sources in the surrounding area. Intel is participating on the New Mexico Environment Department's task force for the air quality study.

As discussed in the Environmental, Health, and Safety Policy, Intel is committed to conserving natural resources and reducing the environmental burden of waste generation. This commitment is evident in Intel's solid and chemical waste recycling programs. In 2002, the site recycled 95% of chemical waste generated, exceeding the corporate goal by 50% and the site goal by 20%. This high recycle rate is largely a result of Intel's wastes being directly reused by other companies. For example, Intel NM ships its Calcium Fluoride cake, which is a byproduct of one of the wastewater treatment systems, to a cement kiln in Colorado for direct reuse. The site also recycled 70% of the solid waste generated, exceeding the corporate goal by 25% yet falling just short of the aggressive site goal of 75%. This is partly due to completion of the Fab 11X facility in April 2002, which significantly reduced the amount of recyclable wastes generated at the site. The site continuously looks to identify new recycle opportunities to improve upon the already high recycling rates. The focus areas in 2002 included improving the recycling process for unusable computer monitors that cannot be donated through Intel's donation process and educating employees on the importance of recycling both at work and at home. Efforts are currently underway to enhance the recycling process for plastic materials and latex gloves.

While Intel strives to meet or exceed all regulatory requirements set forth in our permits, on September 17, 2002, Intel discharged wastewater outside the required pH control range for more than one hour. The City of Albuquerque was notified of the event. The discharge had no negative impact on the City of Albuquerque wastewater treatment plant operation, but Intel NM was issued a written notice of violation (NOV) for the incident. Intel NM fully investigated the cause of the upset and implemented corrective actions to prevent recurrence, which provided satisfactory resolution to the corrective actions set forth in the NOV.

Water is one of many resources that Intel is committed to conserving. The site achieved its goal of maintaining its fresh water use within the historical range established prior to the Fab 11X expansion. In order to meet this goal, Intel made significant improvements to the Process Reclaim Water system, which reuses wastewater from the manufacturing process in other industrial applications, such as cooling towers. In 2002, the efficiency of the system was increased to 100%. In other words, all of the water entering the Process Reclaim Water system is reused, including the brine and reverse osmosis permeate. Improvements such as this have helped Intel to reuse nearly three million gallons of water per day, which offset the need for a similar amount of fresh water.

Section VII: Environmental Excellence
Along with the technology improvements offered by the 300-millimeter process run at the new Fab 11X facility come environmental improvements. The development of each new technology is approached as an opportunity to pursue improvements through the "Design for Environmental, Health, and Safety (DfEHS)" philosophy. To achieve these improvements, goals are developed at the research and development stage. After the goals have been set, Intel partners with equipment manufacturers and chemical suppliers to design the equipment and processes to meet these goals. DfEHS has involved EHS staff in the technology development process in a number of areas, including:

	Process development and manufacturing equipment selection
	Chemical selection and waste management
	Natural resource utilization
	Facility design
	Ergonomics and Safety

Another highlight that occurred in 2002 was when Intel registered all sixteen of its semiconductor manufacturing sites, including the NM site, under ISO 14001. ISO 14001 is a voluntary international standard that defines the elements of an environmental management system needed for an organization to effectively manage the environmental aspects of their business. In 2001, the company set a goal to obtain corporate-wide registration. Because Intel already had a strong environmental management system in place, the registration process was done quickly and efficiently. In fact, no changes to the existing systems were required and as little as 40 hours of work were required at individual sites to prepare for and successfully pass the registration audits. The Intel NM site will continue to conduct regular self-audits and will be audited by the third-party registrar at least once every three years to maintain the registration.

As the first recipient of the Green Zia Environmental Excellence Award from the New Mexico Environment Department, Intel has committed our ongoing support of the program and worked with several other NM organizations to develop their environmental systems. In 2002, Intel developed and delivered training on our environmental systems at the Green Zia Workshops in Albuquerque, Santa Fe and Las Cruces. Intel has also worked with individual organizations to share our systems and our perspective on continuous improvement in environmental performance. Through this effort, we hope to continue to drive environmental excellence in ourselves and others.

Section VIII: Environmental, Health and Safety Awards
Intel is proud to have received recognition for its Environmental, Health, and Safety programs and systems. Such recognitions are a tribute to the commitment and dedication of all Intel employees.

Intel NM received the Gold Pretreatment Award from the City of Albuquerque Waste Water Division, making it the sixth time in the last seven years. Intel NM was one of 46 permit holders who received the Gold Pretreatment Award for the reporting period of July 2001 through June 2002. The Gold Pretreatment Award is given to permit holders for: (1) Operation of an active pretreatment system, 100% compliance with the reporting requirements of their permit, and 100% compliance with their discharge limits—which is the basis for Intel's recognition; or (2) Operation of a zero discharge system and 100% compliance with the reporting requirements of their permit; or (3) Exceptional source reduction and pollution prevention in lieu of active pretreatment, 100% compliance with the reporting requirements of their permit, and 100% compliance with their permit discharge limits.

Intel NM was also named the 2002 Business Recycler of the Year Award from the New Mexico Recycle Coalition during their annual conference in Albuquerque in the summer of 2002. Intel NM was recognized for its outstanding contributions to recycling and waste reduction in NM and role-modeling recycling in the state of New Mexico.

Another highlight of the year was when Intel's Environmental, Health and Safety organization was awarded the Intel Quality Award for the second time. The Intel Quality Award is based on the Malcolm Baldridge principles. Only a few internal organizations receive this award each year after completing a rigorous application and review process. The award challenges organizations to aggressively pursue continuous improvement and recognizes those that exemplify superior performance. By sharing their solutions and successful approaches, Intel Quality Award recipients serve as role models to help other Intel organizations boost their overall performance to values, and increase the company's competitiveness.

Section IX: Corporate Citizenship and Community Involvement
Intel NM is committed to being a responsible corporate citizen. The motivation for this comes from one of Intel's long-standing values, which is to be an asset to our communities worldwide. The NM site does this by responding to questions and concerns from neighbors, supporting environmental education programs, and encouraging its employees to volunteer in the community.

Intel NM has also developed a means of sharing information with its neighbors and members of the community through the publication of a quarterly Community Update Newsletter. The newsletter was first published in 2001 and is distributed through area newsstands and mailed upon request. The newsletter focuses on keeping neighbors informed about Intel NM activities, and has standard updates on site activities, EHS information, Intel community involvement programs, and an Intel resources page.

Intel NM also supported the celebration of the Rio Grande through our involvement in the Annual Children's Water Festival and Dia Del Rio. The Children's Water Festival is an annual event that includes nearly 1000 fourth grade students from Albuquerque, Los Lunas, and Rio Rancho. The students learned countless facts about water, the Rio Grande, and the aquifer. Intel volunteers work with students to build model aquifers and teach students the importance of conserving water. Dia Del Rio is a celebration of the Rio Grande from its headwaters in southern Colorado to its outlet in the Gulf of Mexico. Intel celebrated along with local community and other sponsors the historical richness and diversity of the river with live entertainment, environmental education, tree planting in the Bosque, a family bike ride, and various children's activities.