For Intel, A Vote Of Confidence

For Intel, A Vote Of Confidence

By Thomas J. Lueck
The New York Times

December 23, 1982

Throughout the electronics revolution of the 1970's, the Intel Corporation repeatedly proved itself more far-sighted and technologically astute than competing manufacturers of semiconductors and microprocessors.

But for Intel, like other makers of the tiny circuits that provide the ''brains'' for computers, telephone switching equipment and an expanding array of advanced electronic products, the 1980's have brought problems. The recession has reduced sales. Lower capital spending has dulled the entrepreneurial zeal. And Japanese companies have broadened their assault on the American producers' markets.

Thus, the announcement yesterday by the International Business Machines Corporation that it would buy 6.25 million newly issued Intel shares for $250 million is viewed as an attempt to buttress an innovative and highly valued high-tech company. The holding will represent a 12 percent stake.

'Intel Has Taken the Lead'

''Time and again, Intel has taken the lead,'' said Aristide J. Vitolo, a securities analyst for Kidder, Peabody & Company. ''But in a recession, the question is whether they can maintain their lead. And I.B.M. is giving them a big vote of confidence.''

I.B.M.'s decision to acquire the minority share is also regarded as a long-term investment in technology under development at Intel. For I.B.M., the world's largest computer manufacturer, analysts say a stake in Intel may provide rich dividends.

''Beyond doubt, I.B.M. is interested in Intel's technology,'' said Jay W. Cooper, of F. Eberstadt & Company. For its part, Intel said yesterday that the holding would not give I.B.M. automatic access to technology being developed at Intel's headquarters in Santa Clara, Calif.

''It puts no limits on our independence and ability to form technological agreements with others,'' said James Jarrett, an Intel spokesman. But he added, ''We have worked closely with I.B.M. over the years, and this announcement means that will continue.''

Intel was formed in 1968 by Gordon E. Moore, now its 53-year-old chairman; Robert N. Noyce, the co-inventor of the integrated circuit and its vice chairman, also 53, and Andrew S. Grove, 43, its president and chief operating officer. The three men left jobs at the Fairchild Camera and Instrument Corporation to form Intel with $2 million in financing assembled by Arthur Rock, the venture capitalist.

The company's growth became explosive after 1970, when it was the first company to introduce a microprocessor, or computer on a chip. Unlike simpler forms of semiconductors, integrated circuits etched on silicon chips about the size of a fingernail, the microprocessor could be programmed like a computer to perform complex, or ''intelligent,'' tasks.

In the decade that followed, Intel introduced a succession of more advanced chips that became the key parts of computers. Although Intel faced growing competition, its microprocessors often were more powerful, less expensive and on the market sooner than other companies' products, and they found an expanding market.

Intel's revenues, which were $23.4 million in 1972, grew to $854.6 million by 1980, making it one of the nation's fastest-growing companies. In the same period, Intel's net income grew from $3.1 million, to $96.7 million, while its annual spending for research and development rose from $3.4 million, to $96.4 million.

But last year, the recession began to carve deeply into Intel's business as the manufacturers of computers and other high-priced electronics equipment, its biggest customers, saw their sales and profits shrinking. Intel's net income plummeted 72 percent from 1980, to $27.4 million, and revenues declined 7.7 percent, to $788.7 million.

The company continued to show lower earnings in the third quarter, when net income fell 23.6 percent from the 1981 quarter, to $8.4 million.

Last year's difficulties were aggravated by Intel's decision to postpone the introduction of 64K RAM, or random access memory semiconductors, the newest generation of integrated circuits for computers. By being late to enter the market, the company lost ground to Motorola Inc., the Texas Instruments Corporation, and a number of Japanese manufacturers.

The Japanese are now estimated to command more than half the world market for the chips, which are expected to generate $350 million in sales this year and more than four times that amount by 1985.

Intel's prospects in the 64K RAM market, however, were greatly improved in September, when I.B.M., potentially the largest user of the chips, announced an agreement in which Intel will provide it with design and manufacturing technology for the devices.

Illustrations: photo of Intel founders Graph of Intel's rapid growth