2006 Intel Annual Report
2006 was a tough year financially for Intel, but a great year for product introductions. We faced increasing competition, and our revenue declined due to greater than normal pricing pressure. Although we ended the year on a strong note and reported our 20th consecutive year of profitability, our 2006 revenue of $35.4 billion was down 9%, and our operating profit of
$5.7 billion was down 53% compared to 2005. We responded during the year by launching a comprehensive structure and efficiency review, and by implementing a broad restructuring effort aimed at cutting costs and creating a more nimble, customer-oriented Intel. We also accelerated the introduction of new products, leading the industry into an era of energy-efficient, multi-core computing and ending the year with one of the strongest product lineups in our history.
Taking action for the long term
Our restructuring process includes cutting non-essential programs and improving organizational breadth and depth. These actions contributed to an overall decline in headcount of 8,400 from mid-2006 to the end of the year, and we expect headcount to decline by an additional 2,100 by mid-2007.
To sharpen our focus on our core businesses, we also divested several operations, including certain assets of our communications and application processor business. This action impacted the future utilization of Fab 23 in Colorado, which has been put up for sale.
We also made public an innovative process for sustained technology leadership in microprocessors wherein we plan to introduce a new microarchitecture approximately every two years and ramp the next generation of silicon process technology in the intervening years, giving us a roadmap for continuous improvement in our major product lines. We expect that these combined actions will improve our competitive position significantly over the next decade, and will save Intel approximately $2 billion in 2007 and about $3 billion annually beginning in 2008.
Read the full 2006 Intel Annual Report.
