We achieved record revenues in 1997, up 20% over 1996, making this our 11th consecutive year of record revenues. Net income was up 35% to a record $6.9 billion.
We introduced two major new microprocessors in 1997, essentially replacing our previous product lines. In January 1997, we introduced the Pentium(R) processor with MMX(TM) technology, the first chip to include Intel's new technology for improved performance on media-rich applications. In May 1997, we introduced the Pentium(R) II processor, our most powerful processor to date. The Pentium II processor has brought new levels of visual computing to the desktop for consumers as well as small and large businesses. It also provides the performance to drive robust applications running on powerful workstations and servers.
Our investment in the future continued in 1997; we spent $2.3 billion on R&D and $4.5 billion on capital expenditures. Our commitment to R&D creates future generations of products and the manufacturing processes we use to make them, while our capital expenditures ensure the availability of state-of-the-art factories that allow us to deliver high-volume, high-performance microprocessors efficiently.
Throughout 1997, our factories responded superbly to the two major product transitions, ramping new semiconductor processing and packaging technologies at an unprecedented rate. More than 90% of the microprocessors shipped in the fourth quarter were introduced in the first five months of 1997.
In the computing market, the growth of the "basic PC" segment - systems costing less than $1,000 - and the rapid growth of standard high-volume servers based on our microprocessors led to an adaptation of our product lineup and development approach. We implemented a plan to deliver a wide range of processors focused on different computing market segments. In addition, we realigned our management and organizational structure to focus on separate market segments, enabling us to take maximum advantage of the increasingly diverse computing market.
The geographic diversity of Intel's business helped us weather economic problems in various parts of the world. Sluggish demand in Europe in the first part of the year, currency crises in Southeast Asia late in the year and a prolonged economic slowdown in Japan all challenged us. Fortunately, Europe had a strong second-half comeback and the U.S. and China remained healthy.
Despite these challenges, we are more excited than ever about the future of computing and our role in it. With hundreds of millions of connected PCs around the world, people are demanding more and more from their PCs - whether they use them to market new products or to explore online encyclopedias for a school project, whether they link remote workgroups or share family news as it happens, whether they conduct millions of corporate transactions a day or download the family banking statement. Such activities all require powerful microprocessors - the "brains" of PCs and the core of our business.
Our initiatives will focus on all major segments of the computing market. We will continue to deliver high-performance microprocessors that drive high-end PCs and workstations at competitive prices and will still offer powerful microprocessors for the basic PC market segment. Servers based on Intel microprocessors will provide the storage and connection points to corporate networks and the booming Internet. Our networking and communications products will deliver easier manageability and greater bandwidth for a richer experience on the network. And we will continue to build the Intel brand preference that has made Intel a household name around the world.
Beyond our own initiatives, we continue to look for ways to help the computing industry deliver "more uses to more users." We actively invest in companies that have the potential to expand computing and telecommunications capabilities. Working with software developers, we encourage new applications that take advantage of improvements in microprocessor performance and make computing more satisfying for PC users.
We believe our strategy will capture growth in our market segments over the coming years. Our success, as always, rides
on our corporate culture devoted to excellence, the hard work
of our employees and our commitment to stockholder value.
We look forward to the challenges and opportunities of 1998.
| Gordon E. Moore Chairman Emeritus |
Andrew S. Grove Chairman and CEO |
Craig R. Barrett President and COO |
Table of Contents | Annual Report Site Map | Investor Relations | www.intel.com
Legal Notices (C) Intel Corporation
Content published April 6, 1998.