Case study: Intel.

Whatever brand of computer you use, it is very hard to find one that has a CPU (central processing unit) made by any other manufacturer other than Intel or AMD. For much of the time in recent years, Intel has dominated the market with its high-end, high-performance processors, while AMD focused on mid- and low-range processers - and with lower prices. In 2016, when Intel had accumulated more than 70% of the available market share, AMD was the second player with less than 20%. While Intel was comfortable and enjoying its reputation and dominance in the market, the development of new architecture in processor manufacturing in 2017 enabled AMD to achieve higher performance with much lower costs compared with their competitor. This not only allowed many customers to build powerful computers at a more reasonable price, but also enabled the software companies to develop more effective and powerful software with the ability to run heavier tasks more easily and quickly. In 2016, AMD lost USD 498 million; but only three years later they were able to close their year-end accounts for 2019 with USD 341 million in profit. As a result, former market leader Intel, previously so overwhelmingly dominant, now faces not just a stronger and more competitive AMD. The landscape is changing as, with the announcement and launch of Apple Silicon by Apple, and SQ processors by Microsoft, and also with the advance of cloud computing technologies by Amazon and IBM - there is now a very different playing field. Intel now has to struggle to maintain its position, and is under siege. But this represents good news for consumers as prices come crashing down and their devices become faster. As the trade war between the USA and China intensifies, with American chips no longer accessible to the Chinese market, more new competitors may emerge.

• Question 1: How would you interpret the reasons for the delay in the increase of market share of AMD from 2017 until 2019?
• Question 2: How does AMD's performance-to-price ratio impact on the economics of the CPU industry?

- Question 3: Nowadays many tablets are capable of doing things that were only possible using a desktop pc or laptop. What could that mean for Intel?

• Question 4: Can you identify, and elaborate on, problems which might occur in terms of political implications for the future of Intel's business?

short answers please