SANTA CLARA, Calif. Intel Corp.'s heavy dependence on microprocessors and on a few major customers is evidenced in an accounting statement filed with its annual report for 1998, when the company reported an operating profit of $8.38 billion on revenues of $26.8 billion.
The report breaks down Intel's revenue and profits into three product categories. The Intel Architecture Business Group, which sells microprocessors for desktop, mobile and workstation/server systems, returned $9.08 billion in profits and $21.5 billion in revenues. The Computing Enhancement Group, which sells chip sets, embedded processors, controllers and flash memory products, generated $358 million in profits on revenues of $4.05 billion. All other products, consisting of products sold by Intel's Network Communications Group and New Business Group, including networking products, videoconferencing terminals and digital camera manufacturing kits, generated an operating loss of $1.06 billion on revenues of $681 million.
Intel's accounting shows the company's alignment with strategic customers. In 1998, one customer accounted for 13 percent of Intel's revenues and another customer accounted for 11 percent. In 1997, only a single customer had accounted for more than 10 percent of Intel's revenue, while in 1996 no customer exceeded 10 percent of Intel's revenues.