Harpertown Harpertown LV • Quad Core Variant of • Low Voltage Version Penryn for Xeon Server Dunnington • 45Nm Xeon Quad Core

Agenda • Thesis • Industry and Company Overview • Product Pipeline and Drivers • Competition • Risks •Q&A • DCF- Bitching time… Thesis • Widening Technological Edge • Expanding Portfolio of Products • Near-Term Focus, Long-Term Diversification Thesis Overview Products Competition Risks Mike’s Tech Room • Silicon • Microprocessor – Brain of a Computer – Multi-core and Multi-thread – Lithography and Bit Size • Processing Power will TRIPLE by 2011 Thesis Overview Products Competition Risks Moore’s Law •Processing Power Double Every 18- 24 Months. •Self Fulfilling Prophecy •Software Keeps Hardware on its Toes Thesis Overview Products Competition Risks Industry Overview • 2006 Semiconductor Sales : $247B $300.00 $250.00 $200.00 $150.00 $100.00 $50.00 $0.00 Global 1984 1986 Americas Thesis 1988 1990 Overview 1992 Asia-Pacific Products Competition Risks 1994 1996 1998 2000 2002 2004 2006 A History of Being First • 1968 – Founded by Bob Noyce and Gordon Moore • 1969 – First product launched • 1974 – Launched the Intel® 8080 • First general-purpose micro-processor • 2007 – First to produce 45nm chips – World’s first quad-core processor Thesis Overview Products Competition Risks Company Overview-Strategy • “Leap Ahead” – Energy efficient – Improved multitasking – Longer battery life • “Tick-Tock”: – Tock, i.e. new architecture, is built on Intel's time proven manufacturing strategy (the tick) Thesis Overview Products Competition Risks Company Overview • Key Segments: Digital Enterprise Group – 53.5% of Sales – High-end products • Intel Core 2 Quad Processor • Q965 Express Chipset • 82566DM Gigabit Network Connection – Low-end products • Intel Celeron & Celeron D Processor Thesis Overview Products Competition Risks Company Overview • Key Segments: Mobility Group – 38.0% of Sales – Microprocessors and Chipsets designed for Notebooks and Wireless Connectivity – High-end products • Intel Core 2 Duo • Pentium M – Low-end products • Intel Celeron M Thesis Overview Products Competition Risks Company Overview • Key Segments: Flash Memory Group – Products for cell phones, memory cards, and digital audio players •Newco – New flash memory company with STMicroelectronics • 49% partnership with Micron Thesis Overview Products Competition Risks Company Overview Global Sales Breakdown: Japan 11% Europe 17% Asia Pacific 51% Americas 21% Thesis Overview Products Competition Risks Intel Inside • Restructuring: – 2Q spending as a percentage of revenue decreased 9% Q/Q – Laid off 12,200 employees – Expected cost savings: • 2007: $2 Billion • 2008: $3 Billion (30% due to employee restructuring) – Operating income increased 26% Y/Y – Lowered spending outlook FYO7: • Faster factory throughput times • Lower inventory on hand Thesis Overview Products Competition Risks Pipeline Penryn Wolfdale • 45nm – cool and fast • Desktop Penryn variant • Adapted from Core 2 Yorkfield XE Duo • 45nm Quad Core 4Q07 1H08 Harpertown Harpertown LV • Quad Core Variant of • Low Voltage version Penryn for Xeon Server Dunnington • 45nm Xeon Quad Core Thesis Overview Products Competition Risks Pipeline Cont’d Nehalem (teh 1337) Beckton (2009) • NEW Architecture • 8 core Penryn variant • Integrated Memory Westmere Controller • 32nm Nehalem based 2H08 2009, 2010, 2011 Sandy Bridge(2010) Bloomfield XE • 32nm ground up, 8 core Montevina Sandy Bridge(2011)? • Slim, WiMax, Robson 2 •22nm…. Thesis Overview Products Competition Risks Near-term Growth Drivers • Strong chipset order in 2Q07 • Mobility group: 23% Y/Y growth in 2Q07 • Management guidance – Higher 3Q and 4Q chipset revenue – Great Server and Notebook sales • Edge over rivals – 45nm, 32nm chips Thesis Overview Products Competition Risks Steve Has a Job for Intel… Thesis Overview Products Competition Risks Long-term Growth Drivers • Solid State Drives • Ultra Mobile PCs – WiMax • Flash Memory – 45.1% ownership interest in Newco – 49% partnership with Micron… iPods anyone? • Emerging markets: – Solid international infrastructure – 79% revenue from outside US – Revenue growth in Asia-Pacific 11% Y/Y Thesis Overview Products Competition Risks Competition Eggs anyone? Kaboom Thesis Overview Products Competition Risks Risks • Unsuccessful launch of Penryn and Nehalem • Failure with transitioning to 45 nm technology • Execution issues such as product defects • Aggressive ASP and competition from AMD, IBM • Inventory glut Thesis Overview Products Competition Risks Q&A Global Sales Figures Penryn vs Merom Yorkfield vs Kentfield Harpertown vs. Others Various Valuations Global Sales Figures Year Number of Employees% outsi de US 2002 78700 35 2003 79700 40 Return to Q&A 2004 85000 40 2005 99900 50 2006 MID 100000 50 2006 94100 50 2007 E 92000 ?? Sales by Region 2006 % 2005 % 2004 % Asia-Pacific 17477 49.40% 19330 49.77% 15380 45.49% America 7512 21.23% 7574 19.50% 7965 23.56% Europe 6587 18.62% 8219 21.16% 7355 21.75% Japan 3806 10.76% 3712 9.56% 3109 9.20% Total 35382 100.00% 38835 100.00% 33809 100.00% Sales by Region 2003 % 2002 % 2001 % Asia-Pacific 8403 27.88% 8648 32.31% 9382 35.35% America 12161 40.35% 10073 37.64% 8308 31.30% Europe 6868 22.79% 6139 22.94% 6500 24.49% Japan 2709 8.99% 1904 7.11% 2349 8.85% Total 30141 100.00% 26764 100.00% 26539 100.00% Penryn vs. Merom Penryn System Merom System Core 2 Duo 2.80GHz, T7800, 2.60GHz, 800MHz FSB 800MHz FSB 6MB L2, dual- 4MB L2, dual- CPU core core Penryn Merom Dell Latitude Dell Latitude System System System D830 D830 TMPGEnc 4.0 Express Graphics Intel GMA Intel GMA X3100 4.3.3.9999 Beta Graphics Intel Intel (seconds, lower is better) 151 239 Driver 7.14.10.12.53 7.14.10.12.53 DivX 6.6.1 w/ 2 x 1GB Hynix 2 x 1GB Hynix (seconds, lower is Memory DDR2-667 DDR2-667 better) 20.5 38.9 Hard Fujitsu Fujitsu Drive MHW2080BH MHW2080BH 80GB 5400RPM 80GB 5400RPM Windows Vista Windows Vista Return OS Ultimate 32-bit Ultimate 32-bit Yorkfield vs Kentsfield Return Harpertown vs Clovertown vs Barcelona 2.0, 2.5 Return Simulating Enterprise Conditions Return.

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