1981 Intel Annual Report

In its first decade, the microprocessor has been designed into more than 100,000 products. 1981 was a very difficult year for Intel. Our financial results were seriously affected by competitive and economic forces. Revenues decreased from the previous year by 8%, net income dropped 72%, and net income per share fell 72% to $.61. By far the single largest contributor to these drops was the strong price erosion for LSI memory components that resulted from industry overcapacity.

In spite of record unit volumes and the success of our cost reduction and yield improvement programs, the revenue and pretax profits contributed by memory components each dropped by more than $100 million from the preceding year. This product area continues under strong competitive pressure, and it is unlikely to improve significantly until overcapacity in the industry decreases and the world economy strengthens.

Other portions on Intel’s business were not so severely affected. Microcomputer components expanded in revenue, year to year, in spite of rapid price decreases in many instances. Broad and system level products showed considerably greater price stability and contributed a greater share to our results in the past.

Read the full 1981 Intel Annual Report.