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Intel Corp · 10-K · For 12/27/97

Filed On 3/27/98 · SEC File 333-45395 · Accession Number 50863-98-31

  As Of               Filer                 Filing     On/For/As Docs:Pgs

 3/27/98  Intel Corp                        10-K       12/27/97    9:84

Annual Report · Form 10-K
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 10-K        Quarterly Report for 12 Months Ending December 27,    21    124K 
                          1997                                                   
 2: EX-3.1      Articles of Incorporation/Organization or By-Laws     13     48K 
 3: EX-12       Statement re: Computation of Ratios                    1      7K 
 4: EX-13       Annual or Quarterly Report to Security Holders        41±   193K 
 5: EX-21       Subsidiaries of the Registrant                         1      4K 
 6: EX-23       Consent of Experts or Counsel                          1      8K 
 7: EX-27.1     Financial Data Schedule                                2±     9K 
 8: EX-27.2     Financial Data Schedule                                2±     9K 
 9: EX-27.3     Financial Data Schedule                                2±     9K

10-K · Quarterly Report for 12 Months Ending December 27, 1997
Document Table of Contents

Page	(sequential)	\|	(alphabetic)	Top
			Alternative Formats (RTF, XML, et al.) Business ** Certain Relationships and Related Transactions Changes in and Disagreements With Accountants on Accounting and Financial Disclosure Competition Directors and Executive Officers of the Registrant Executive Compensation Executive Officers Exhibits, Financial Statement Schedules and Reports on Form 8-K Financial Statements and Supplementary Data Legal Proceedings Management's Discussion and Analysis of Financial Condition and Results of Operations Market for the Registrant's Common Equity and Related Stockholder Matters Properties Quantitative and Qualitative Disclosures About Market Risk Security Ownership of Certain Beneficial Owners and Management Selected Financial Data Submission of Matters to a Vote of Security Holders
1	1st Page
2	Item 1. Business **
7	Competition
9	Executive Officers
11	Item 2. Properties
12	Item 3. Legal Proceedings
13	Item 4. Submission of Matters to a Vote of Security Holders
14	Item 5. Market for the Registrant's Common Equity and Related Stockholder Matters
"	Item 6. Selected Financial Data
15	Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations
"	Item 7a. Quantitative and Qualitative Disclosures About Market Risk
"	Item 8. Financial Statements and Supplementary Data
"	Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure
16	Item 10. Directors and Executive Officers of the Registrant
"	Item 11. Executive Compensation
"	Item 12. Security Ownership of Certain Beneficial Owners and Management
"	Item 13. Certain Relationships and Related Transactions
17	Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K

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UNITED STATES       
SECURITIES AND EXCHANGE COMMISSION    
Washington, D.C. 20549    

FORM 10-K       
(Mark One)                                                                      
[X]  Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange   
Act of 1934                                                           
For the fiscal year ended December 27, 1997,  OR                      

[ ]  Transition Report Pursuant to Section 13 or 15(d) of the Securities        
Exchange Act of 1934                                                  
For the transition period from                to                      
                        ----------------  ----------------

Commission File Number 0-6217                                                   

     INTEL CORPORATION
    (Exact name of registrant as specified in its charter)
Delaware                                         94-1672743 
(State or other jurisdiction of                            (I.R.S. Employer     
incorporation or organization)                            Identification No.)   

     2200 Mission College Boulevard, Santa Clara, California, 95052-8119
  (Address of principal executive offices, Zip Code)

     Registrant's telephone number, including area code (408) 765-8080

     Securities registered pursuant to Section 12(b) of the Act:

Title of each class                          Name of each exchange on 
                                                  which registered
    NONE

         Securities registered pursuant to Section 12(g) of the Act:

   Common Stock, $.001 par value
    1998 Step-Up Warrants to Purchase Common Stock

Indicate by check mark whether the registrant (1) has filed all reports         
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of   
1934 during the preceding 12 months (or for such shorter period that the        
registrant was required to file such reports), and (2) has been subject to such 
filing requirements for the past 90 days. YES  X   NO                           
                        ------  ------
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405  
of Regulation S-K is not contained herein, and will not be contained, to the    
best of registrant's knowledge, in definitive proxy or information statements   
incorporated by reference in Part III of this Form 10-K or any amendment to     
this Form 10-K. [  ]                                                            

 Aggregate market value of voting stock held
 by non-affiliates of the registrant as of February 28, 1998
$136.5 billion  

    1,626.8 million shares of Common Stock outstanding as of February 28, 1998

DOCUMENTS INCORPORATED BY REFERENCE                                             

(1)  Portions of Annual Report to Stockholders for fiscal year ended December   
27, 1997 - Parts I, II and IV.                                        
(2)  Portions of the Registrant's Proxy Statement related to the 1998 Annual    
Meeting of Stockholders, to be filed subsequent to the date hereof -  
Part III.                                                             

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PART I
------

ITEM 1.   BUSINESS  **                                                          

Industry                                                                        

Intel Corporation and its subsidiaries (collectively called "Intel," the        
"Company" or the "Registrant") operates predominantly in one industry segment.  
The Company designs, develops, manufactures and markets computer components and 
related products at various levels of integration. Intel's principal components 
consist of silicon-based semiconductors etched with complex patterns of         
transistors. Many of these integrated circuits can perform the functions of     
millions of individual transistors, diodes, capacitors and resistors. The       
Company was incorporated in California in 1968 and reincorporated in Delaware   
in 1989.                                                                        

Products                                                                        

The Company's major products include microprocessors, chipsets, graphics        
products, embedded processors and microcontrollers, flash memory products,      
network and communications products, conferencing products and digital imaging  
products. Intel sells its products to original equipment manufacturers ("OEMs") 
of computer systems and peripherals; PC users, who buy Intel's PC enhancements, 
business communications products and networking products through reseller,      
retail and OEM channels; and other manufacturers, including makers of a wide    
range of industrial and telecommunications equipment.                           

Microprocessors.                                                                
----------------  A microprocessor is the central processing unit of a computer 
system. It processes system data and controls other devices in the system,      
acting as the brains of a computer. Intel's flagship microprocessors include    
the Pentium(R) processor with MMX(TM) technology and the sixth-generation       
processor family (including Pentium(R) II and Pentium(R) Pro microprocessors).  

Intel's developments in the area of semiconductor design and manufacturing have 
made it possible to decrease the feature size of circuits etched into silicon.  
This permits a greater number of transistors to be used on each microprocessor  
die, and a greater number of microprocessors to be placed on each silicon       
wafer. The result is  smaller, faster microprocessors that consume less power   
and cost less to manufacture. In 1997, the Company introduced and rapidly       
ramped manufacturing capacity on its most advanced 0.25-micron process          
technology, enabling high-volume production of its newest, fastest              
microprocessors.                                                                

The year 1997 was one of major product transitions for Intel.  The Company      
introduced two major new microprocessor products (described below), effectively 
replacing its previous product lines in this area.  Over 90% of the             
microprocessors shipped in the fourth quarter were introduced in the first      
five months of 1997.  Also during the year, the Company began to focus on       
separate market segments, from the basic PC (systems costing less than $1,000)  
to high-performance workstations and servers, which the Company believes offer  
expanded growth opportunities. As a result, the Company is implementing new     
plans and strategies to embrace all major market segments.                      

In January 1997, Intel unveiled the Pentium processor with MMX technology, the  
first chip to include the Company's new technology to improve performance on    
media-rich applications.  New systems and new software optimized for the        
Pentium processor with MMX technology were available at the time of the         
processor's introduction, paving the                                            

------------                                                                    
** Page references to the 1997 Annual Report to Stockholders or to the          
Registrant's 1998 Proxy Statement related to the 1998 Annual Meeting of         
Stockholders under Item 1 in Part I and Items 5, 6, 7, 7A and 8 in Part II;     
10, 11, 12 and 13 in Part III and 14 in Part IV relate to the bound, printed    
versions of such  Report and Proxy Statement, not to the electronic versions    
appearing at the Intel Internet site (www.intel.com). However, all data         
referred to also appears in the electronic versions.                            

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way for market acceptance of the product.  The Company initially offered the    
Pentium processor with MMX technology at speeds of 200 and 166 MHz for desktop  
systems and 166 and 150 MHz for mobile computers.                               

Later in the year, Intel expanded this key product line by introducing new      
speeds and models.  Introduced in June, a 233-MHz Pentium processor with MMX    
technology provides a higher-performance option for desktop and server systems. 
Intel expanded the mobile computing line with Pentium processors with MMX       
technology at 133 MHz in May, 233 MHz and 200 MHz in September, and 266 MHz in  
January 1998, all aimed at notebook computers. The Company also introduced a    
120-MHz version in October 1997 and a 166-MHz version in January 1998 designed  
especially for the mini-notebook computer market segment.  The processors       
optimized for mobile applications consume less power and come in a smaller      
package than the desktop/server versions.                                       

Intel also expanded its OverDrive(R) processor family of upgrade microprocessors
in 1997.  In March, Intel introduced the Pentium Overdrive(R) processor with MMX
technology at speeds of 166, 150 and 125 MHz, and in August Intel announced     
the addition of 200- and 180-MHz versions. This OverDrive processor allows      
computer users to upgrade most older Pentium processor-based systems to take    
advantage of the benefits of the MMX media enhancement technology, bringing     
richer multimedia performance to Pentium processor-based PCs in a single        
upgrade chip.                                                                   

In May 1997, the Company launched the Pentium II processor, a new version of    
its sixth-generation microarchitecture, which incorporates MMX technology for   
optimal media performance and provides more processing power than any other     
Intel chip to date.  Introduced at speeds of 300, 266 and 233 MHz, the Pentium  
II processor provides the performance to drive enterprise computing, deliver    
enhanced capabilities to small businesses, and power demanding workstation      
systems.  The Pentium II processor's Dual Independent Bus architecture          
addresses the bandwidth limitations of previous-generation processor            
architectures by using two independent buses that can access data               
simultaneously and in parallel.  The processor also incorporates Dynamic        
Execution technology, which extends the raw performance of the processor by     
allowing more data to be processed in parallel in a given period of time.       
These advanced technologies enable the Pentium II processor to deliver          
superior results in all three key elements of microprocessor performance:       
floating point, multimedia and integer calculations. In January 1998, Intel     
introduced its fastest microprocessor to date, the 333-MHz Pentium II           
processor.                                                                      

Intel also introduced a new version of its Pentium Pro microprocessor           
running at 200 MHz, with one megabyte of integrated Level 2 cache, compared     
to 512 kilobytes of Level 2 cache in previous versions.  As the larger Level    
2 cache improves the performance of the processor in multiple-processor         
systems, this new Pentium Pro processor is targeted for multiprocessing servers 
and it offers Intel's highest performance for four-way processor and higher     
based enterprise server systems.                                                

While many of Intel's original equipment manufacturer (OEM) customers use the   
Company's microprocessors as components in designing their own computer         
products, some OEMs use Intel-designed board-level products as basic building   
blocks in their computer products. OEM customers may buy at this level of       
integration to accelerate their time-to-market and to direct their investments  
to other areas of their product lines. The Company provides board-level         
products to give OEM customers flexibility by enabling them to choose whether   
to buy at the component or board level.                                         

Sales of Pentium family microprocessors and related board-level products        
comprised a majority of the Company's revenues and gross margin during 1997.    
During 1996 and 1995, a majority of the Company's revenues and a substantial    
majority of its gross margin were derived from these products.  Sales of        
Pentium Pro and Pentium II microprocessors became an increasing portion of      
the Company's revenues and gross margin in 1996 and a significant portion in    
1997.   The Intel486(TM) microprocessor family contributed significant but      
declining revenues and gross margin in 1995 and negligible revenues             
and gross margin in 1996.                                                       

In 1997, the Company announced that the first member of its new family of       
64-bit microprocessors, the Merced(TM) processor, is scheduled to ship in 1999. 
The Merced processor will extend the Intel Architecture with new levels of      
performance and features for the server and workstation market segments, while  
still running all the software that currently operates on 32-bit Intel          
processor-based machines.  During the past two years, Intel has been working    
with industry leaders to create operating systems, applications software and    
systems that will capitalize on the new IA-64(TM)  architecture.                

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In March 1998, the Company announced a new brand name, Celeron(TM), for a       
processor that will be designed for the basic PC market segment. The Intel      
Celeron processor will be based on the same Intel sixth-generation              
microarchitecture upon which the Pentium II processor is based and is intended  
to offer a cost-effective solution for PC manufacturers designing basic PC      
systems. The Celeron processor product is expected to be announced in April.    

Chipsets.                                                                       
---------  The Company's core-logic chipsets support incremental performance,   
ease-of-use and new capabilities for systems based on the Intel Pentium,        
Pentium II and Pentium Pro microprocessors. Compatible with the Peripheral      
Components Interconnect (PCI) bus, and more recently the Accelerated Graphics   
Port (AGP), these chipsets perform essential logic functions surrounding the    
CPU and support and extend the graphic, video and other capabilities of many    
Intel processor-based systems.  The Intel 430 PCIset family chipsets are found  
in many mobile and desktop Pentium processor systems. The Intel 430TX PCIset is 
designed to maximize performance of media-rich applications in PCs based on the 
Pentium processor with MMX technology.                                          

In 1997, Intel introduced the Intel 440LX AGPset, a highly integrated chipset   
featuring AGP technology.  Combined with the Pentium II processor, the 440LX    
AGPset provides the foundational hardware for a new class of PCs optimized for  
visual computing, facilitating computer manufacturers' development and          
production of computers delivering improved 3-D imaging performance.            

Graphics Products.                                                              
------------------  In February 1998, Intel announced its new Intel740(TM)      
graphics accelerator chip, optimized for use with the Pentium II processor      
platform and Intel's AGPset chipsets.  The Intel740 chip introduces a new 3-D   
architecture, HyperPipeline 3-D, which includes Parallel Data Processing, for   
superior 3-D acceleration; Precise-Pixel Interpolation, for realistic image     
quality; and Direct Memory Execution, enabling more memory bandwidth.           

In January 1998, Intel acquired Chips and Technologies, Inc., a leading         
supplier of notebook graphics accelerator chips. The acquisition is aimed at    
advancing Intel's capabilities for graphics and visual computing in mobile      
personal computers.                                                             

Embedded Processors and Microcontrollers.                                       
-----------------------------------------  Intel provides embedded products     
such as microprocessors, microcontrollers and memory components to a wide range 
of manufacturers. Embedded products are used in products such as industrial PCs,
point-of-sales terminals, telecommunications equipment, automobile engine and   
braking systems, hard disk drives, laser printers, input/output control modules,
home appliances, factory automation control products and medical                
instrumentation.                                                                

Intel's embedded products line consists of the 32-bit i960(R) processor family; 
the 16-bit 80C186 processor family; 16-bit MCS(R) 96 and 296 microcontrollers;  
and 8-bit microcontrollers, such as the MCS 51 and MCS 151/251 microcontroller  
families. In addition, embedded Intel Architecture products, including the      
Intel386(TM), Intel486 and Pentium processor families, and the Intel Embedded   
Processor Module, a board-level product, provide the power of Intel             
Architecture processors to embedded applications.                               

The Company introduced several embedded control products in 1997, including     
the i960 RD I/O processor, dedicated to high-performance input/output           
subsystems for network servers in enterprise applications such as electronic    
commerce, database inquiries and manipulation of video, audio and rich          
graphics.  The i960 RD I/O processor doubles the performance of its predecessor 
and is used in both server motherboards and adapter cards to complement servers 
based on the Intel Architecture.                                                

Also during 1997, Intel and industry leaders unveiled the first Intel-based     
servers with Intelligent Input/Output technology and Intel I/O processors.      
Intelligent Input/Output technology offloads I/O activity from the server's     
main microprocessor to an I/O processor such as the i960 processor, increasing  
overall server performance and scalability.                                     

Flash Memory Products.                                                          
----------------------  Memory components are used to store user data and       
computer program code. Flash memory retains information when the power is off.  
Intel was a key player in defining and promoting the Miniature Card             
specification for low-cost, very small form-factor flash cards to be used in a  
variety of consumer electronics applications.                                   

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In September 1997, the Company introduced the first flash memory products to    
store multiple bits of data in one memory cell, Intel StrataFlash(TM) memory,   
expanding memory density capacity for a variety of consumer and network         
applications. In November, the Company unveiled a new family of Miniature       
Cards based on the Intel StrataFlash memory, the Intel Series 200 Flash Memory  
Miniature Cards. Available in 4-, 8- and 16-Mbyte densities, the Series 200     
Miniature Cards are designed to be used repeatedly without loss of image        
quality, making them one of the most cost-effective removable-media solutions   
for applications such as electronic film for today's digital cameras.           

Network and Communications Products.                                            
------------------------------------  These hardware and software products are  
sold to corporate network administrators, small businesses and individual PC    
users through reseller, retail and original equipment manufacturer channels.    
Intel's networking products are designed to help reduce the total cost of       
networked business computing by providing high-bandwidth communications to PC   
desktop and server systems, and making it easier for local area network (LAN)   
administrators to install and manage their systems. Intel's networking products 
consist of network management products, including the LANDesk(R) Network        
Management product family, and LAN hardware products, such as the EtherExpressT 
adapters and Express Switching Hubs and Stackable Hubs.                         

New or upgraded LANDesk Network Management products in 1997 included: LANDesk(R)
Management Suite 6, providing an integrated set of services that allows IT      
managers to control and manage client PCs on both Windows* NT and NetWare       
networks from a single console; LANDesk(R) Virus Protect, offering centrally    
managed virus protection; and LANDesk Client Manager, which monitors PC health  
and provides self-help diagnostics.                                             

Also in 1997, Intel introduced several new or upgraded LAN products: the Intel  
Express 510T Switch, making it more cost-effective and easier for businesses    
to deploy Fast Ethernet networks; the Express 8100 Router, providing a          
versatile Virtual Private Network for branch services with privacy protection   
features; the Intel Express 10/100 Stackable Hub, a stackable hub offering      
both 10 and 100 Mbps access at under $100 per port; the 82558, a single-chip    
Fast Ethernet solution for 10/100 networking; a family of adapters based on     
the 82558 chip; and a new adapter for mobile PCs that provides 10/100 Fast      
Ethernet access with a high-speed 56 kbps modem in a single PC card. The new    
switch and router products were made possible in part by Intel's acquisition    
of Case Technology, based in Copenhagen, Denmark, in February of 1997.          

In January 1998, Intel announced its family of Intel InBusiness(TM) networking  
products designed for small businesses. The family of nine products offers a    
combination of hubs, switches and internet connectivity devices to help small   
businesses get connected easily and affordably.                                 

Conferencing Products.                                                          
----------------------  The Intel ProShare(R) conferencing technology is used in
a PC-based video-conferencing system that offers full application and document  
sharing. The technology supports video and data conferences over ISDN or        
corporate LAN networks.  In 1997, the Company introduced Intel Business Video   
Conferencing 4.0 with ProShare Technology, the latest in the Company's          
desktop video conferencing line, and the Intel TeamStation(TM) system, a new    
group video conferencing system for meeting rooms.  Also in 1997, the Company   
introduced the Intel Create & Share(TM) camera pack, a PC communications, photo 
and video editing package.  The camera pack includes an Intel PC camera,        
hardware and an integrated suite of communications and image-editing software.  

Digital Imaging Products.                                                       
-------------------------  During 1997, Intel announced its 971 PC Camera Kit   
for manufacturers, which includes Intel PC camera silicon, software,            
schematics, design documentation and suggested manufacturing procedures.        
Manufacturers can use the 971 PC Camera Kit to bring affordable, easy-to-use,   
portable PC cameras to market quickly.  Helping bring digital cameras to        
market is just one of many initiatives Intel is working on to help expand the   
PC's capabilities and put more power and performance in the hands of computer   
users.                                                                          

------------                                                                    
*  Other brands and names are the property of their respective owners.          

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Manufacturing                                                                   

A substantial majority of the Company's wafer production, including             
microprocessor fabrication, and a significant portion of the assembly and       
final testing of the resulting components is conducted at domestic Intel        
facilities in Arizona, Oregon, California and New Mexico.                       

Outside the United States, a significant portion of Intel's wafer production    
is conducted at plants in Israel and Ireland. A majority of the Company's       
component assembly and testing (including Pentium processor and                 
sixth-generation processor assembly and testing) is performed at facilities in  
Malaysia and the Philippines. The Company is also adding assembly and test      
facilities in other geographic areas (China and Costa Rica, for example) and    
expects these new locations to be operational in 1998.                          

In general, if Intel were unable to fabricate wafers or assemble or test its    
products abroad, or if air transportation between its foreign facilities and    
the United States were disrupted, there could be a material adverse effect      
upon the Company's operations. In addition to normal manufacturing risks,       
foreign operations are subject to certain additional exposures, including       
political instability, currency controls and fluctuations, and tariff and       
import restrictions. To date, Intel has not experienced significant             
difficulties related to these foreign business risks.                           

Intel produces microprocessor board-level products and systems at domestic      
facilities in Oregon, Washington and Puerto Rico, as well as outside the United 
States at its facility in Ireland. To augment capacity, Intel uses              
subcontractors to perform assembly of certain products and wafer fabrication    
for certain components, primarily flash memory and chipsets, and for production 
capacity of board-level products.                                               

The manufacture of integrated circuits is a complex process. Normal             
manufacturing risks include errors and interruptions in the fabrication process 
and defects in raw materials, as well as other risks, all of which can affect   
yields. A substantial decrease in yields would result in higher manufacturing   
costs and the possibility of not being able to produce a sufficient volume of   
good units to meet demand.                                                      

Employees                                                                       

At December 27, 1997, the Company employed approximately 63,700 people          
worldwide.                                                                      

Sales                                                                           

Most of Intel's products are sold or licensed through sales offices located     
near major concentrations of users throughout the United States, Europe, Japan, 
Asia-Pacific and other parts of the world.                                      

The Company also uses distributors (industrial and retail) and representatives  
to distribute its products both within and outside of the United States.        
Typically, distributors handle a wide variety of products, including those      
competitive with Intel products, and fill orders for many customers. Most of    
Intel's sales to distributors are made under agreements allowing for price      
protection and/or the right of return on unsold merchandise. Sales              
representatives generally do not offer directly competitive products, but may   
carry complementary items manufactured by others. Representatives do not        
maintain a product inventory; instead, their customers place large-quantity     
orders directly with Intel and are referred to distributors for smaller orders. 
Intel sold products to over one thousand customers worldwide in 1997. Sales to  
Compaq Computer Corporation represented 12% of total revenues. No other         
customer accounted for more than 10% of total revenues.                         

Reference is made to information on sales to unaffiliated customers, transfers  
between geographic regions, net revenues, operating income and identifiable     
assets attributable to the Company's geographic regions appearing under the     
heading "Industry Segment Reporting" on pages 17 and 18 of the Registrant's     
1997 Annual Report to Stockholders, which information is hereby incorporated    
by reference.                                                                   

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Backlog                                                                         

Intel's sales are made primarily pursuant to standard purchase orders for       
delivery of standard products. Intel has some agreements that give a customer   
the right to purchase a specific number of products during a time period.       
Although not generally obligating the customer to purchase any particular       
number of such products, some of these agreements do contain billback clauses.  
Under these clauses, customers who do not purchase the full volume agreed to    
are liable for billback on previous shipments up to the price appropriate for   
the quantity actually purchased. As a matter of industry practice, billback     
clauses are difficult to enforce. The quantity actually purchased by the        
customer, as well as the shipment schedules, are frequently revised during the  
agreement term to reflect changes in the customer's needs.  In light of         
industry practice and experience, Intel does not believe that such agreements   
are meaningful for determining backlog figures. Intel believes that only a      
small proportion of its order backlog is noncancellable and that the dollar     
amount associated with the noncancellable portion is immaterial. Therefore,     
Intel does not believe that backlog as of any particular date is necessarily    
indicative of future results.                                                   

Competition                                                                     

The Company competes in different product lines to various degrees on the       
basis of quality, performance, availability and price. Intel is engaged in a    
rapidly advancing field of technology in which its ability to compete depends   
upon the continuing improvement of its products and processes, the development  
of new products to meet changing customer requirements and continuing cost      
reduction. Prices decline rapidly in the semiconductor industry as unit volume  
grows, as competition develops, and as production experience is accumulated.    
Many companies compete with Intel and are engaged in the same basic fields of   
activity, including research and development. Both foreign and domestic,        
these competitors range in size from large multinationals to smaller companies  
competing in specialized market segments.                                       

A number of competitors have developed and begun marketing software compatible  
products that are intended to compete with Intel's Pentium processor family     
and sixth-generation microprocessors, including the Pentium II processor. Once  
it is introduced, the Celeron processor will compete with existing and future   
products in the basic PC market segment. Many of Intel's competitors are        
licensed to use Intel patents. Furthermore, based on the current case law,      
Intel's competitors can design microprocessors that are compatible with Intel   
microprocessors and avoid Intel patent rights through the use of foundry        
services that have licenses with Intel. Competitors' products may add features, 
increase performance or sell at lower prices. The Company also faces            
significant competition from companies that offer rival microprocessor          
architectures. The Company cannot predict whether such rival architectures      
will establish or increase market acceptance or provide increased competition   
to the Company's products. Future distortion of price maturity curves could     
occur as software compatible products enter the market in significant volume or 
alternative architectures gain market acceptance.                               

Intel's strategy is to introduce ever higher performance microprocessors        
tailored for the different segments of the worldwide computing market. To       
implement this strategy, the Company plans to cultivate new businesses and      
continue to work with the software industry to develop compelling               
applications that can take advantage of this higher performance, thus driving   
demand toward the newer products in each computing market segment. In line      
with this strategy, the Company is seeking to develop higher performance        
microprocessors for each market segment, including servers, workstations,       
high-end business PCs, the basic PC and other product lines. Intel also is      
committed to the protection of its intellectual property rights against         
illegal use. There can be no assurance, however, that competitors will not      
introduce new products (either software compatible or of rival architectural    
designs) or reduce prices on existing products. Such developments could have    
an adverse effect on Intel's revenues and margins.                              

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Research and Development                                                        

The Company's competitive position has developed to a large extent because of   
its emphasis on research and development. This emphasis has enabled Intel to    
deliver many products before they have become available from competitors, and   
thus has permitted Intel's customers to commit to the use of these new          
products in the development of their own products. Intel's research and         
development activities are directed toward developing new products, hardware    
technologies and processes, and improving existing products and lowering        
their cost. Intel is jointly developing a new 64-bit microprocessor             
architecture and software optimizations with a third party. The new products    
based on the IA-64(TM) architecture are expected to be initially targeted at    
server, workstation and enterprise computing products. The first product, the   
Merced(TM) processor, is scheduled to ship in 1999, and the second IA-64        
processor is slated for 2001. The Company also develops "enabling" software     
technologies, such as open software specifications and software tools,          
to enhance the functionality and acceptance of the personal computer platform.  
Intel's expenditures for research and development were $2,347 million, $1,808   
million and  $1,296 million in fiscal years 1997, 1996 and 1995, respectively.  
As of December 27, 1997, Intel had approximately 12,600 employees engaged in    
research and development. The results of Intel's research and development       
activities depend upon competitive circumstances and Intel's ability to         
transfer new products to production in a timely and cost-effective manner.      

Most design and development of components and other products is performed at    
Intel's facilities in California, Oregon, Arizona and Israel.                   

Intellectual Property and Licensing                                             

Intellectual property rights that apply to various Intel products include       
patents, copyrights, trade secrets, trademarks and maskwork rights. Because of  
the rapidly changing technology and a broad distribution of patents in the      
semiconductor industry, Intel's present intention is not to rely primarily on   
intellectual property rights to protect or establish its market position.       
However, Intel has established an active program to protect its investment in   
technology by enforcing its intellectual property rights. Intel does not        
intend to broadly license its intellectual property rights unless it can obtain 
adequate consideration. Reference is also made to the heading "Competition."    

Intel has filed and obtained a number of patents in the United States and       
abroad. Intel has entered into patent cross-license agreements with many of     
its major competitors and other parties.                                        

Intel protects many of its computer programs by copyrighting them. Intel has    
registered numerous copyrights with the United States Copyright Office. The     
ability to protect or to copyright software in some foreign jurisdictions is    
not clear. However, Intel has a policy of requiring customers to obtain a       
software license contract before providing a customer with certain computer     
programs. Certain components have computer programs embedded in them, and       
Intel has obtained copyright protection for some of these programs as well.     
Intel has obtained protection for the maskworks for a number of its components  
under the Chip Protection Act of 1984.                                          

Intel has obtained certain trademarks and trade names for its products to       
distinguish genuine Intel products from those of its competitors and is         
currently engaged in a cooperative program with OEMs to identify personal       
computers that incorporate genuine Intel microprocessors with the Intel         
Inside(R) logo. Intel maintains certain details about its processes, products   
and strategies as trade secrets.                                                

As is the case with many companies in the semiconductor industry, Intel has,    
from time to time, been notified of claims that it may be infringing certain    
intellectual property rights of others. These claims have been referred to      
counsel, and they are in various stages of evaluation and negotiation. If it    
appears necessary or desirable, Intel may seek licenses for these intellectual  
property rights.  Intel can give no assurance that licenses will be offered by  
all claimants, that the terms of any offered licenses will be acceptable to     
Intel or that in all cases the dispute will be resolved without litigation.     
Reference is made to the information appearing under the heading "Legal         
Proceedings" in Part I, Item 3 of this document.                                

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Compliance with Environmental Regulations                                       

To Intel's present knowledge, compliance with federal, state and local          
provisions enacted or adopted for protection of the environment has had no      
material effect upon its operations. However, reference is made to Part I,      
Item 3. "Legal Proceedings", of this Form 10-K.                                 

Executive Officers                                                              

The following sets forth certain information with regard to executive officers  
of Intel (ages are as of December 27, 1997):                                    

Craig R. Barrett (age 58) has been a director of Intel since 1992; Chief        
Operating Officer since 1993; and President since 1997. The Board of Directors  
has announced that it will elect Dr. Barrett Chief Executive Officer effective  
May 20, 1998.  Prior to becoming President, Dr. Barrett was Executive Vice      
President from 1990 to 1997.                                                    

Andrew S. Grove (age 61) has been a director of Intel since 1974; Chief         
Executive Officer since 1987; and Chairman of the Board since 1997.   The       
Board of Directors has announced that it will elect Craig Barrett as Chief      
Executive Officer effective May 20, 1998.  Prior to becoming Chairman,          
Dr. Grove was President from 1979 to 1997.                                      

Gordon E. Moore (age 68) has been a director of Intel since 1968 and Chairman   
Emeritus of the Board since 1997. Prior to that, Dr. Moore was Chairman of      
the Board from 1979 to 1997.                                                    

Leslie L. Vadasz (age 61) has been a director of Intel since 1988; and Senior   
Vice President, Director of Corporate Business Development since 1991.          

Frank C. Gill (age 54) has been Executive Vice President and General Manager,   
Small Business and Networking Group since 1997. Prior to that, Mr. Gill was     
Executive Vice President and General Manager, Internet and Communications Group 
from 1996 to 1997;  and Senior Vice President and General Manager, Intel        
Products Group from 1991 to 1996.                                               

Paul S. Otellini (age 47) has been Executive Vice President and General         
Manager, Intel Architecture Business Group since January 1998. Prior to that,   
Mr. Otellini was Executive Vice President, Director, Sales and Marketing Group  
from 1996 to 1998;  Senior Vice President, Director, Sales and Marketing Group  
from 1994 to 1996; and Senior Vice President and General Manager,               
Microprocessor Products Group from 1992 to 1994.                                

Gerhard H. Parker (age 54) has been Executive Vice President and General        
Manager, Technology and Manufacturing Group since 1996.  Prior to that, Dr.     
Parker was Senior Vice President and General Manager, Technology and            
Manufacturing Group from 1992 to 1996.                                          

Ronald J. Whittier (age 61) has been Senior Vice President and General Manager, 
Content Group since 1995.  Prior to that, Mr. Whittier was Senior Vice          
President and General Manager, Intel Architecture Laboratories from 1992 to     
1995.                                                                           

Albert Y. C. Yu (age 56) has been Senior Vice President and General Manager,    
Microprocessor Products Group since 1993.  Prior to that, Dr. Yu was Vice       
President and General Manager, Microprocessor Products Group from 1991 to 1993. 

Michael A. Aymar (age 50) has been Vice President and General Manager, Consumer 
Products Group since 1997. Prior to that, Mr. Aymar was Vice President and      
General Manager, Desktop Products Group from 1995 to 1997; Vice President and   
General Manager, Intel486 Microprocessor Division from 1994 to 1995; and Vice   
President and General Manager, Mobile Computing Group from 1991 to 1994.        

Andy D. Bryant (age 47) has been Vice President and Chief Financial Officer     
since 1994.  Prior to that, Mr. Bryant was Vice President, Intel Products Group 
from 1990 to 1994.                                                              

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Executive Officers, continued                                                   

Dennis Carter (age 46) has been Vice President, Director, Sales and Marketing   
Group since 1996. Prior to that Mr. Carter was Vice President, Corporate        
Marketing Group from 1992 to 1996.                                              

F. Thomas Dunlap, Jr. (age 46) has been Vice President, General Counsel and     
Secretary since 1987.                                                           

Patrick P. Gelsinger (age 36) has been Vice President and General Manager,      
Business Platform Group since 1997.  Prior to that, Mr. Gelsinger was Vice      
President and General Manager, Desktop Products Group from 1996 to 1997; Vice   
President, Internet and Communications Group and General Manager ICG Product    
Development from 1995 to 1996; Vice President, Intel Products Group and General 
Manager, Personal Conferencing Division from 1993 to 1995; and Vice President,  
Intel Products Group and General Manager, PC Enhancement Division- Business     
Communications from 1992 to 1993.                                               

Sean M. Maloney (age 41) has been Vice President, Director, Sales and Marketing 
Group since February 1998. Prior to that, Mr. Maloney was Vice President, Sales 
and General Manager, Asia-Pacific Operations from 1995 to 1998; and Technical   
Assistant to the Chief Executive Officer from 1992 to 1995.                     

John H. F. Miner (age 42) has been Vice President and General Manager,          
Enterprise Server Group since 1996.  Prior to that, Mr. Miner was Vice          
President, Desktop Products Group and General Manager, OEM Products and         
Services Division from 1995 to 1996; General Manager, OEM Products and Services 
Division from 1993 to 1995; and General Manager, OEM Modules Operation from     
1992 to 1993.                                                                   

Stephen P. Nachtsheim (age 52) has been Vice President and General Manager,     
Mobile/Handheld Products Group since 1995.  Prior to that, Mr. Nachtsheim was   
Vice President and General Manager, Mobile and Home Products Group from 1994    
to 1995; and General Manager of European Intel Products Group from 1990 to      
1994.                                                                           

Ronald J. Smith (age 47) has been Vice President and General Manager, Computing 
Enhancement Group since 1996.  Prior to that, Mr. Smith was Vice President,     
Desktop Products Group and General Manager, PCI Components Division from 1995   
to 1996; and he served in the positions of General Manager, Programmable Logic  
Device Operation and before that, General Manager, Gate Array Operation for the 
period 1992 to 1995.                                                            

Arvind Sodhani (age 43) has been Vice President and Treasurer since 1988.       

Michael J. Splinter (age 47) has been Vice President and Assistant General      
Manager, Technology and Manufacturing Group since 1996. Prior to that, Mr.      
Splinter was Vice President and General Manager, Components Manufacturing from  
1992 to 1996.                                                                   

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ITEM 2.   PROPERTIES                                                            

At December 27, 1997, Intel owned the major facilities described below:         

                                                                · Download Table

                                                                               
No. of Bldgs.     Location          Total Sq. Ft.             Use              
-------------     --------          -------------             ---              
    65            United States     13,350,000     Executive and administrative
                                                   offices, wafer fabrication, 
                                                   components assembly and     
                                                   testing, research and       
                                                   development, computer and   
                                                   service functions, board and
                                                   system assembly, and        
                                                   warehousing.                

     9            Ireland            1,830,000     Wafer fabrication, board and
                                                   system assembly and         
                                                   administrative offices.     

     9            Malaysia (A)       1,071,000     Components assembly and     
                                                   testing, board and system   
                                                   assembly, warehousing       
                                                   and administrative offices. 

     7            Israel (B)           814,000     Wafer fabrication, research 
                                                   and development and         
                                                   administrative offices.     

     1            Philippines          431,000     Components assembly and     
                                                   testing, warehousing and    
                                                   administrative offices.     

     5            Puerto Rico          426,000     Board and system assembly,  
                                                   warehousing and             
                                                   administrative offices.     

     1            England              184,000     Sales and marketing and     
                                                   administrative offices.     

     1            China                170,000     Components assembly and     
                                                   testing and administrative  
                                                   offices.                    

     3            Japan                167,000     Sales and marketing and     
                                                   administrative offices.     

     1            Germany               86,000     Sales and marketing and     
                                                   administrative offices.     


At December 27, 1997, Intel also leased 31 major facilities in the U.S.         
totaling approximately 996,000 square feet and 26 facilities in other countries 
totaling approximately 1,211,000 square feet. These leases expire at varying    
dates through 2007 and include renewals at the option of Intel.                 

Intel believes that its existing facilities are suitable and adequate for its   
present purposes, and the productive capacity in such facilities is in general  
being utilized. Intel also has 6.6 million square feet of building space under  
various stages of construction in the United States and abroad for              
manufacturing and administrative purposes.                                      

(A)  Leases on portions of the land used for these facilities expire in 2033    
through 2057.                                                         

(B)  Lease on a portion of the land used for these facilities expires in 2039.  

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ITEM 3.   LEGAL PROCEEDINGS                                                     

A. Litigation                                                                   

        EMI Group, NA v. Intel
       U.S. District Court, District of Del. (C95-199-RRM)
       ---------------------------------------------------

On March 29, 1995, EMI Group, NA ("EMI") brought suit in Federal District Court 
in Delaware against Intel, alleging that certain Intel manufacturing processes  
infringe a U.S. patent. In May 1996, the Court granted Intel's motion for       
summary judgment on some of the processes in issue. In November 1996, the Court 
granted Intel's motion for summary judgment on the remaining processes in issue 
and entered judgment in favor of Intel and against the plaintiff on the claims  
in EMI's complaint. A hearing on EMI's appeal of the grant of summary judgment  
was heard in August 1997. No decision has been issued. Although the ultimate    
outcome of this lawsuit cannot be determined at this time, management,          
including internal counsel, does not believe that the ultimate outcome will     
have a material adverse effect on Intel's financial position or overall trends  
in results of operations.                                                       

          Digital Equipment Corporation v. Intel
         U.S. District Court, District of Mass. (97-40080)
         -------------------------------------------------

Digital Equipment Corporation ("Digital") brought suit in Federal District      
Court in Massachusetts in May 1997, alleging that Intel is infringing ten       
patents in making and selling microprocessor products. Digital sought an        
injunction and monetary damages. If granted, the injunction would prohibit      
Intel from using Digital's patented technology in its microprocessor products.  
The Company believes that its products do not infringe the Digital patents.     
The Company filed a counterclaim against Digital for infringement of nine       
microprocessor-related patents, and, in District Court in Oregon, the Company   
claimed that Digital infringes on six video and computer system patents. In     
October 1997, Intel and Digital announced that they have agreed to establish    
a broad-based business relationship. The agreement includes sale of Digital's   
semiconductor manufacturing operations to Intel, a 10-year patent               
cross-license, supply of both Intel and Alpha microprocessors by Intel to       
Digital and development by Digital of future systems based on Intel's 64-bit    
microprocessors. The two companies agreed to request a stay of all lawsuits     
until government review of the agreement is completed, following which the      
lawsuits would be dismissed with prejudice. Although the ultimate outcome of    
this lawsuit cannot be determined at this time, management, including           
internal counsel, does not believe that the ultimate outcome will have a        
material adverse effect on Intel's financial position or overall trends in      
results of operations.                                                          

   Intergraph Corporation v. Intel
U.S. District Court, Northern District of Alabama, Northeastern Division  
------------------------------------------------------------------------  
 (CV-97-N-3023-NE)
 -----------------
In November 1997, Intergraph Corporation ("Intergraph") filed suit in Federal   
District Court in Alabama generally alleging that Intel attempted to coerce     
Intergraph into relinquishing certain patent rights relating to microprocessor  
and chipset interaction in multiprocessor workstations. The suit also alleges   
that Intel infringes three Intergraph patents and includes alleged violations   
of antitrust laws. The suit seeks injunctive relief along with unspecified      
damages. In November 1997, Intel filed suit against Intergraph in Federal       
District Court in California seeking a declaratory judgment that the Intergraph 
patents are invalid. Intel also filed an action in the same court alleging      
breach of contract and misappropriation of trade secrets based on Intergraph's  
refusal to return Intel confidential information as contractually required.     
Although the ultimate outcome of this lawsuit cannot be determined at this      
time, management, including internal counsel, does not believe that the         
ultimate outcome will have a material adverse effect on Intel's financial       
position or overall trends in results of operations.                            

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      Cyrix Corporation v. Intel
   U.S. District Court, E.D. Texas (4-97cv164)
   -------------------------------------------

Cyrix Corporation ("Cyrix") brought suit in Federal District Court in Texas in  
May 1997, alleging that Intel infringed two patents relating to                 
microprocessors. Cyrix became a wholly owned subsidiary of National             
Semiconductor Corporation ("National") in November 1997. On February 3, 1998,   
Intel and National  announced that they have settled the Cyrix lawsuit and      
extended the term of the existing patent cross-license agreement between the    
companies.                                                                      

     Michael W. Scriber v. Intel
     U.S. District Court for the District of Oregon (CV-1262-AS)
     -----------------------------------------------------------

Michael W. Scriber, a former employee of the Company, filed an action in        
Federal District Court in Oregon in September 1996 alleging that Intel's        
products infringe a patent issued to the plaintiff and that Intel wrongfully    
terminated his employment. On January 21, 1998, the Court granted Intel's       
motions for summary judgment on all claims. The plaintiff has appealed this     
decision. Although the ultimate outcome of this lawsuit cannot be determined at 
this time, management, including internal counsel, does not believe that the    
ultimate outcome will have a material adverse effect on Intel's financial       
position or overall trends in results of operations.                            

B. Environmental Proceedings                                                    

Intel has been named to the California and U.S. Superfund lists for three of    
its sites and has completed, along with two other companies, a Remedial         
Investigation/Feasibility study with the U.S. Environmental Protection Agency   
(EPA) to evaluate the groundwater in areas adjacent to one of its former sites. 
The EPA has issued a Record of Decision with respect to a groundwater cleanup   
plan at that site, including expected costs to complete. Under the California   
and U.S. Superfund statutes, liability for cleanup of this site and the         
adjacent area is joint and several. The Company, however, has reached agreement 
with those same two companies which significantly limits the Company's          
liabilities under the proposed cleanup plan. Also, the Company has completed    
extensive studies at its other sites and is engaged in cleanup at several of    
these sites. In the opinion of management, including internal counsel, the      
potential losses to the Company in excess of amounts already accrued arising    
out of these matters will not have a material adverse effect on the Company's   
financial position or overall trends in results of operations, even if joint    
and several liability were to be assessed.                                      

ITEM 4.   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS                   

None.                                                                           

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PART II **      
----------      

ITEM 5.   MARKET FOR THE REGISTRANT'S COMMON EQUITY AND                         
RELATED STOCKHOLDER MATTERS                                 

   (a)     Reference is made to the information regarding market, market price
 range and dividend information appearing under "Financial
          Information by Quarter (Unaudited)" on page 25 of the Registrant's
      1997 Annual Report to Stockholders which information is hereby
incorporated by reference.                              

(b)     As of February 28, 1998, there were approximately 179,000       
      registered holders of record of the Registrant's Common Stock.

(c)     Unregistered sales of equity securities.                        

For the fiscal quarter ended December 27, 1997, the Company sold 19.8 million   
put warrants to banks and investment banks during October and November, and     
received proceeds of $98 million. The put warrants entitle the holder of each   
warrant to sell to the Company, by physical delivery, one share of Common Stock 
at a specified price. They expire on various dates between February and June    
1998 and have exercise prices ranging from $68 to $78 per share, with an        
average exercise price of $74. All of these transactions were exempt from       
registration under Section 4(2) of the Securities Act of 1933, as amended.      
Each transaction was privately negotiated and each offeree and purchaser was    
an accredited investor/qualified institutional buyer. No public offering or     
public solicitation was used by the registrant in the placement of these        
securities.                                                                     

ITEM 6.   SELECTED FINANCIAL DATA                                               

Reference is made to the information regarding selected financial data for the  
fiscal years 1993 through 1997, under the heading "Financial Summary" on page   
20 of the Registrant's 1997 Annual Report to Stockholders, which information    
is hereby incorporated by reference.                                            

In addition, the ratios of earnings to fixed charges for each of the five years 
in the period ended December 27, 1997 are as follows:                           

                                                                · Download Table

                    Fiscal Year                 
------------------------------------------------
                                                
1993       1994       1995       1996       1997

 54x        39x        68x       108x       206x

Fixed charges consist of interest expense and the estimated interest component  
of rent expense.                                                                

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ITEM 7.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL                     
CONDITION AND RESULTS OF OPERATIONS                         

Reference is made to the information appearing under the heading "Management's  
Discussion and Analysis of Financial Condition and Results of Operations" on    
pages 21 through 25 of the Registrant's 1997 Annual Report to Stockholders,     
which information is hereby incorporated by reference.                          

Intel's 1998 Step-Up Warrants expired on March 14, 1998. Between December 27,   
1997 and March 14, 1998, 78 million Warrants were exercised at $20.875 per      
Warrant, and the Company received proceeds of approximately $1.6 billion.       

Between December 27, 1997 and March 25, 1998, Intel repurchased 22 million      
shares of Common Stock under the Company's authorized stock repurchase program  
at a cost of $1.8 billion, including 1.7 million shares for $127 million upon   
the exercise of outstanding put warrants. During the same period, 9.8 million   
previously outstanding put warrants expired unexercised. As of March 25, 1998,  
the Company had the potential obligation to repurchase 14.8 million shares of   
Common Stock at an aggregate price of $1.2 billion under outstanding put        
warrants. These put warrants expire on various dates between May 1998 and       
August 1998 and have exercise prices ranging from $69 to $95 per share, with    
an average exercise price of $80. On March 25, 1998, the Company's Board of     
Directors approved an increase of up to 100 million additional shares in the    
Company's repurchase program. This increase brings the total authorization to   
380 million shares. After allowing for shares to cover outstanding put          
warrants, 129.8 million shares remain available for repurchase under the        
repurchase authorization as of March 25, 1998.                                  

ITEM 7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK            

Reference is made to the information appearing under the subheading "Financial  
Market Risks" under the heading "Management's Discussion and Analysis of        
Financial Condition and Results of Operations" on page 23 of the Registrant's   
1997 Annual Report to Stockholders, which information is hereby incorporated    
by reference.                                                                   

ITEM 8.   FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA                           

Consolidated financial statements of Intel Corporation at December 27, 1997 and 
December 28, 1996 and for each of the three years in the period ended December  
27, 1997 and the Report of Independent Auditors thereon and Intel Corporation's 
unaudited quarterly financial data for the two-year period ended December 27,   
1997 are incorporated by reference from the Registrant's 1997 Annual Report to  
Stockholders, on pages 4 through 20 and page 25.                                

ITEM 9.   CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON                      
ACCOUNTING AND FINANCIAL DISCLOSURE                         

Not applicable.                                                                 

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PART III  
--------  

ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT                    

Reference is made to the information regarding Directors and Executive Officers 
appearing under the heading "Election of Directors" on pages 2 through 5 of the 
Registrant's Proxy Statement related to the 1998 Annual Meeting of Stockholders 
(the "1998 Proxy Statement"), which information is hereby incorporated by       
reference, and to the information under the heading "Executive Officers" in     
Part I hereof.                                                                  

ITEM 11.  EXECUTIVE COMPENSATION                                                

Reference is made to the information appearing under the headings "Directors'   
Compensation," "Compensation Committee Interlocks and Insider Participation,"   
and "Executive Compensation," on pages 7, 12 and 14 through 16, respectively,   
of the  1998 Proxy Statement, which information is hereby incorporated by       
reference.                                                                      

ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND                   
MANAGEMENT                                                  

Reference is made to information appearing in the 1998 Proxy Statement, under   
the heading "Security Ownership of Certain Beneficial Owners and Management,"   
on pages 17 and 18, which information is hereby incorporated by reference.      

ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS                        

Reference is made to information appearing in the 1998 Proxy Statement, under   
the heading "Certain Relationships and Related Transactions," on page 12,       
which information is hereby incorporated by reference.                          

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PART IV     
-------     

ITEM 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON                
FORM 8-K                                                    

(a)  1.   Financial Statements                                        

          The financial statements listed in the accompanying index to
        financial statements and financial statement schedules are
       filed or incorporated by reference as part of this annual
report.                                           

2.   Financial Statement Schedule                           

         The financial statement schedule listed in the accompanying
   index to financial statements and financial statement
schedules is filed as part of this annual report. 

3.   Exhibits                                               

       The exhibits listed in the accompanying index to exhibits
           are filed or incorporated by reference as part of this annual
report.                                           

(b)       Reports on Form 8-K                                         

            On October 15, 1997, Intel filed a report on Form 8-K relating
            to financial information for Intel Corporation for the quarter
     ended September 27, 1997 and forward-looking statements
        relating to the Fourth  Quarter of 1997, as presented in a
press release of October 14, 1997.                

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 INDEX TO FINANCIAL STATEMENTS
 AND FINANCIAL STATEMENT SCHEDULES
   (Item 14 (a))

                                                                · Download Table

                                                          Reference Page      
                                                          --------------      
                                                                              
                                                                          1997
                                                                        Annual
                                                 Form                Report to
                                                 10-K             Stockholders
                                                 ----             ------------

Consolidated Balance Sheets-                                                  
  December 27, 1997 and December 28, 1996    ................................5
Consolidated Statements of Income for                                         
  the years ended December 27, 1997,                                          
  December 28, 1996 and December 30, 199    .................................4
Consolidated Statements of Cash Flows                                         
  for the years ended December 27, 1997,                                      
  December 28, 1996 and December 30, 1995   .................................6
Consolidated Statements of Stockholders'                                      
  Equity for the years ended December 27, 1997,                               
  December 28, 1996 and December 30, 1995   .................................7
Notes to Consolidated Financial Statements-                                   
  December 27, 1997, December 28, 1996 and                                    
  December 30, 1995  .....................................................8-18
Report of Ernst & Young LLP, Independent Auditors ..........................19
Supplementary Information (unaudited)                                         
  Financial Information by Quarter .........................................25
Schedule for years ended December 27, 1997,                                   
  December 28, 1996 and December 30, 1995:                                    
        II-  Valuation and Qualifying Accounts ....19                         


Schedules other than the one listed above are omitted for the reason that they  
are not required or are not applicable, or the required information is shown in 
the financial statements or notes thereto.                                      

The consolidated financial statements listed in the above index, which are      
included in the Company's 1997 Annual Report to Stockholders, are hereby        
incorporated by reference.  With the exception of the pages listed in the       
above index and the portions of such report referred to in Items 1, 5, 6, 7,    
7A and 8 of this Form 10-K, the 1997 Annual Report to Stockholders is not to be 
deemed filed as part of this report.                                            

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 INTEL CORPORATION
 -----------------

 SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS

December 30, 1995, December 28, 1996 and December 27, 1997
   (In Millions)

                                                                · Download Table
                                            Additions                         
                               Balance at  Charged to                  Balance
                                Beginning   Costs and                   at End
                                  of Year    Expenses  Deductions (A)  of Year
                                  -------    --------  --------------  -------
                                                                              

1995                                                                          

Allowance for Doubtful Receivables    $32         $28      $ 3             $57
                                      ---         ---      ---             ---
1996                                                                          

Allowance for Doubtful Receivables    $57         $25      $14             $68
                                      ---         ---      ---             ---
1997                                                                          

Allowance for Doubtful Receivables    $68         $ 2      $ 5             $65
                                      ---         ---      ---             ---


(A)  Uncollectible accounts written off, net of recoveries.                     

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       INDEX TO EXHIBITS
(Item 14(a))                                                                    
Description                                                     

3.1     Intel Corporation Restated Certificate of Incorporation dated May 11,   
1993 and Certificate of Amendment to the Restated Certificate of
Incorporation dated June 2, 1997.                               

3.2     Intel Corporation Bylaws as amended (incorporated by reference to       
 Exhibit 4.2 of Registrant's Registration Statement on Form S-8 as
filed on February 3, 1997).                                     

4.1     Agreement to Provide Instruments Defining the Rights of Security        
 Holders (incorporated by reference to Exhibit 4.1 of Registrant's
Form 10-K as filed on March 28, 1986).                          

4.2     Warrant Agreement dated as of March 1, 1993, as amended between the     
  Registrant and Harris Trust and Savings Bank (as successor Warrant
   Agent) related to the issuance of 1998 Step-Up Warrants to purchase
Common Stock of Intel Corporation (incorporated by reference to 
  Exhibit 4.6 of Registrant's Form 10-K as filed on March 25, 1993),
  together with the First Amendment to Warrant Agreement dated as of
    October 18, 1993, the Second Amendment to Warrant Agreement dated as
    of January 17, 1994 (incorporated by reference to Exhibit 4.4 of the
Registrant's Form 10-K as filed on March 25, 1994), the Third   
    Amendment to Warrant Agreement dated as of May 1, 1995 (incorporated
  by reference to Exhibit 4.2 of the Registrant's Form 10-K as filed
      on March 29, 1996) and the Fourth Amendment to Warrant Agreement dated
   as of May 21, 1997 (incorporated by reference to Exhibit 4.2 of the
Registrant's Form 10-Q as filed on August 11, 1997).            

10.1*   Intel Corporation 1984 Stock Option Plan as amended and restated,       
      effective March 26, 1997 (incorporated by reference to Exhibit 10.l of
Registrant's Form 10-K as filed on March 28, 1997).             

10.2*   Intel Corporation 1988 Executive Long Term Stock Option Plan as         
amended and restated, effective March 26, 1997 (incorporated by 
reference to Exhibit 10.2 of Registrant's Form 10-K as filed on 
March 28, 1997).                                                

10.3*   Intel Corporation Executive Officer Bonus Plan as amended and           
restated effective January 1, 1995 (incorporated by reference to
     Exhibit 10.7 of Registrant's Form 10-Q for the quarter ended April 5,
1995 as filed on May 15, 1995).                                 

10.4*   Intel Corporation Sheltered Employee Retirement Plan Plus, as           
       amended and restated effective July 15, 1996 (incorporated by reference
      to Exhibit 4.1.1 of Registrant's Registration Statement on Form S-8 as
filed on July 17, 1996).                                        

10.5*   Intel Corporation Special Deferred Compensation Plan (incorporated      
     by reference to Exhibit 4.1 of Registrant's Registration Statement on
Form S-8 as filed on February 2, 1998).                         

12.     Statement Setting Forth the Computation of Ratios of Earnings to Fixed  
Charges.                                                        

13.     Portions of the Annual Report to Stockholders for fiscal year ended     
December 27, 1997 expressly incorporated by reference herein.   

21.     Intel Subsidiaries.                                                     

23.     Consent of Ernst & Young LLP, Independent Auditors.                     

27.     Financial Data Schedules.                                               

------------                                                                    
*  Compensation plans or arrangements in which directors and executive officers 
are eligible to participate.                                              

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    SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange  
Act of 1934, the Registrant has duly caused this report to be signed on its     
behalf by the undersigned, thereunto duly authorized.                           

INTEL CORPORATION                                                               
-----------------                                                               
Registrant                                                                      

By /s/ F. Thomas Dunlap, Jr.                                                    
-------------------------                                                 
F. Thomas Dunlap, Jr.                                                     
Vice President and Secretary                                              
March  25, 1998                                                           

Pursuant to the requirements of the Securities Exchange Act of 1934, this       
report has been signed below by the following persons on behalf of the          
Registrant and in the capacities and on the dates indicated.                    

/s/ Craig R. Barrett                         /s/ Gordon E. Moore                
--------------------                         -------------------                
Craig R. Barrett                             Gordon E. Moore                    
President, Chief Operating                   Chairman Emeritus                  
Officer and Director                         and Director                       
March 25, 1998                               March 25, 1998                     

/s/ John Browne                              /s/ Arthur Rock                    
---------------                              ---------------                    
John Browne                                  Arthur Rock                        
Director                                     Director                           
March 24, 1998                               March 25, 1998                     

/s/ Andy D. Bryant                           /s/ Jane E. Shaw                   
------------------                           ----------------                   
Andy D. Bryant                               Jane E. Shaw                       
Vice President, Chief Financial              Director                           
Officer, and Principal                       March 25, 1998                     
Accounting Officer                                                              
March 25, 1998                               /s/Leslie L. Vadasz                
                             -------------------
                          Leslie L. Vadasz
/s/ Winston H. Chen                          Director                           
-------------------                          March 25, 1998                     
Winston H. Chen                                                                 
Director                                                                        
March 25, 1998                               /s/ David B. Yoffie                
                             -------------------
                         David B. Yoffie
/s/ Andrew S. Grove                          Director                           
-------------------                          March 25, 1998                     
Andrew S. Grove                                                                 
Chairman of the Board and                                                       
Director,  Principal Executive               /s/ Charles E. Young               
Officer                                      --------------------               
March 25, 1998                               Charles E. Young                   
                  Director
                        March 24, 1998
/s/ D. James Guzy                                                               
-----------------                                                               
D. James Guzy                                                                   
Director                                                                        
March 25, 1998

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Dates Referenced Herein and Documents Incorporated By Reference

		Referenced-On Page
This 10-K Filing	Date	First	Last	Other Filings

	3/1/93	20
	3/25/93	20
	5/11/93	20
	10/18/93	20
	1/17/94	20
	3/25/94	20		10-K
	1/1/95	20
	3/29/95	12
	4/5/95	20
	5/1/95	20
	5/15/95	20
	12/30/95	18	19	10-K
	3/29/96	20		10-K
	7/15/96	20
	7/17/96	20		S-8 POS
	12/28/96	15	19	PRE 14A, DEF 14A, 10-K
	2/3/97	20		S-8
	3/26/97	20
	3/28/97	20		10-K
	5/21/97	20
	6/2/97	20
	8/11/97	20		10-Q
	9/27/97	17		10-Q
	10/14/97	17		8-K
	10/15/97	17		8-K
For The Period Ended	12/27/97	1	20	DEF 14A
	1/21/98	13
	2/2/98	20		S-8
	2/3/98	13		SC 14D1/A
	2/28/98	1	14
	3/14/98	15
	3/24/98	21
	3/25/98	15	21
Filed On / Filed As Of	3/27/98
	5/20/98	9

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Intel Corp · 10-K · For 12/27/97

Filed On 3/27/98 · SEC File 333-45395 · Accession Number 50863-98-31

Annual Report · Form 10-KFiling Table of Contents

10-K · Quarterly Report for 12 Months Ending December 27, 1997Document Table of Contents

Dates Referenced Herein and Documents Incorporated By Reference

Annual Report · Form 10-K
Filing Table of Contents

10-K · Quarterly Report for 12 Months Ending December 27, 1997
Document Table of Contents