Agenda. Thesis Industry and Company Overview Product Pipeline and Drivers Competition Risks Q&A DCF- Bitching time

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2 Agenda Thesis Industry and Company Overview Product Pipeline and Drivers Competition Risks Q&A DCF- Bitching time

3 Thesis Widening Technological Edge Expanding Portfolio of Products Near-Term Focus, Long-Term Diversification

4 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

5 Moore s Law Processing Power Double Every Months. Self Fulfilling Prophecy Software Keeps Hardware on its Toes

6 Industry Overview 2006 Semiconductor Sales : $247B $ $ $ $ $ $50.00 $0.00 Global Am ericas Asia-Pacific

7 A History of Being First 1968 Founded by Bob Noyce and Gordon Moore 1969 First product launched 1974 Launched the Intel First general-purpose micro-processor First to produce 45nm chips World s first quad-core processor

8 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)

9 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

10 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

11 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

12 Company Overview Global Sales Breakdown: Japan 11% Europe 17% Asia Pacific 51% Americas 21%

13 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

14 Pipeline Penryn 45nm cool and fast Adapted from Core 2 Duo Wolfdale Desktop Penryn variant Yorkfield XE 45nm Quad Core 4Q07 1H08 Harpertown Quad Core Variant of Penryn for Xeon Server Harpertown LV Low Voltage version Dunnington 45nm Xeon Quad Core

15 Pipeline Cont d Nehalem (teh 1337) NEW Architecture Integrated Memory Controller Beckton (2009) 8 core Penryn variant Westmere 32nm Nehalem based 2H , 2010, 2011 Bloomfield XE Montevina Slim, WiMax, Robson 2 Sandy Bridge(2010) 32nm ground up, 8 core Sandy Bridge(2011)? 22nm.

16 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

17 Steve Has a Job for Intel

18 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

19 Competition Eggs anyone? Kaboom

20 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

21 Q&A Global Sales Figures Penryn vs Merom Yorkfield vs Kentfield Harpertown vs. Others

22 Various Valuations

23 Global Sales Figures Year Number of Employees% outside US Return to Q&A MID E 92000?? Sales by Region 2006 % 2005 % 2004 % Asia-Pacific % % % America % % % Europe % % % Japan % % % Total % % % Sales by Region 2003 % 2002 % 2001 % Asia-Pacific % % % America % % % Europe % % % Japan % % % Total % % %

24 Penryn vs. Merom Penryn System Merom System 2.80GHz, 800MHz FSB Core 2 Duo T7800, 2.60GHz, 800MHz FSB 6MB L2, dualcore CPU Dell Latitude System D830 Graphics Intel GMA Graphics Intel Driver x 1GB Hynix Memory DDR2-667 Hard Fujitsu Drive MHW2080BH 4MB L2, dualcore Dell Latitude D830 Intel GMA X3100 Intel x 1GB Hynix DDR2-667 Fujitsu MHW2080BH TMPGEnc 4.0 Express Beta (seconds, lower is better) DivX w/ (seconds, lower is better) Penryn System Merom System OS 80GB 5400RPM Windows Vista Ultimate 32-bit 80GB 5400RPM Windows Vista Ultimate 32-bit Return

25 Yorkfield vs Kentsfield Return

26 Harpertown vs Clovertown vs Barcelona 2.0, 2.5 Return

27 Simulating Enterprise Conditions Return