INTEL CORP, 10-K, 1994-03-25

INTEL CORP
10-K, 1994-03-25
SEMICONDUCTORS & RELATED DEVICES

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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 (Fee Required) For the
fiscal year ended December 25, 1993, OR

[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 (No Fee Required) For the transition period
from______________________________________to

Commission File Number 0-6217

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

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:

<TABLE>
<S> <C>
Title of each class Name of each exchange on
which registered
</TABLE>
NONE

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

Common Stock, $.001 par value
Common Stock Purchase Rights
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 (Paragraph 229.405 of this chapter) 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. [X]

Aggregate market value of voting stock held
by non affiliates of the registrant as of February 26, 1994

$26,802,725,000

419,879,840 shares of Common Stock Outstanding as of February 26, 1994

DOCUMENTS INCORPORATED BY REFERENCE

(1) Portions of Annual Report to Stockholders for fiscal year ended
December 25, 1993-Items 5, 6, 7, 8 and 14.
(2) Portions of Proxy Statement dated March 21, 1994 -Items 10, 11, 12, and
13.

No. 242026-001
===============================================================================
<PAGE> 2
PART I
ITEM 1. BUSINESS

INDUSTRY

Intel Corporation and its subsidiaries (collectively called "Intel," the
"Company" or the "Registrant") operate in one dominant industry segment. The
Company designs, develops, manufactures and markets advanced microcomputer
components and related products at various levels of integration.

Intel components consist of silicon-based semiconductors etched with complex
patterns of transistors. Each one of these integrated circuits (ICs) can
perform the functions of thousands- or even millions-of individual transistors,
diodes, capacitors and resistors.

PRODUCTS

Intel's product strategy is twofold: the Company offers to OEMs (original
equipment manufacturers) a wide range of PC (personal computer) building-block
products to meet their needs, and offers to PC users products that expand the
capability of their systems and networks.

The Company's major products include microprocessors, embedded products, memory
chips, computer modules and boards, network and communication products,
personal conferencing products and parallel supercomputers.

MICROPROCESSORS. A microprocessor is the central processing unit of a
PC. It processes system data and controls other devices in the system, acting
as the brains of a PC. Intel's 32-bit processors include the flagship
Pentium(TM) family and the Intel486(TM) microprocessor family. Pentium
processors are the latest extension of an architecture that is pervasive
worldwide; the market research firm Dataquest estimates that over 105 million
PCs based on Intel architecture are currently in use (compared to fewer than 20
million PCs based on other architectures). The Company's strategy is to develop
products in the Intel architecture family which are compatible with the
installed base of software applications.

Intel's developments in the art of semiconductor design and manufacturing have
made it possible to decrease the feature size of circuits etched into silicon.
This means that a greater number of transistors can be fit on each silicon
wafer, resulting in microprocessors that are smaller, faster running, more
energy efficient, and less expensive to make.

Within the Intel486 microprocessor product family, certain designations and
product names differentiate the processors from one another. SX and DX are used
to designate the earlier, lower-cost generations of the family. The IntelDX2(TM)
chip is designed with speed-doubling technology that is up to twice the speed
of the Intel486 DX processor and is targeted at high-volume entry level systems
for business and home users. Introduced in early 1994, the IntelDX4(TM)
processor, the fastest member of the Intel486 microprocessor family, is
appropriate for both desktop and mobile systems. The IntelDX4 processor family
offers up to 50 percent more performance than the 66-MHz IntelDX2
microprocessor. In addition, the Company has added its SL technology to the
Intel486 CPU line, allowing computer manufacturers to implement
power-management features in hardware at no price premium.

In 1993, Intel introduced the 60- and 66-MHz Pentium processors that process up
to 112 million instructions per second (MIPS). In March 1994, Intel announced
3.3 volt, 90- and 100-MHz Pentium processors that process up to 166 MIPS. All
members of the Pentium family contain energy- efficient circuitry. The Company
is planning to release its next-generation microprocessor, now under
development and code-named the P6, in 1995. Completely binary compatible with
previous generations of the Intel architecture, the P6 is expected to operate
between 250-300 MIPS.

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<PAGE> 3

Sales of the Intel486 CPU family of microprocessors comprised a majority of the
Company's revenues and a substantial majority of its gross margin in 1992 and
1993. In 1991, combined sales of the Intel486 and Intel386(TM) microprocessor
families comprised a majority of revenues and a substantial majority of gross
margin. The Pentium processor began to contribute significantly to overall
revenue growth in the fourth quarter of 1993. The Company expects its Intel486
family of microprocessors to follow a normal price maturity curve, but some
distortion could occur if imitation products enter the market in significant
volume or alternative architectures gain acceptance. Intel expects to ship
several million Pentium processors in 1994, but to some extent such sales
depend on peripheral products supplied by other companies.

EMBEDDED PRODUCTS. Embedded chips provide the computing power in devices other
than PCs and workstations. Embedded products are dedicated to specific
application functions and are found in printers, copiers, fax machines, VCRs,
cable converter boxes and other TV equipment, in commercial and military
avionics, in medical instrumentation, and in factory automation control
products.

Intel's embedded product line consists of 32-bit processors, including the
i960(R) processor family, which are the best selling RISC (reduced instruction
set computing) chips in the world in terms of units sold (according to
Dataquest); embedded Intel386 processors that primarily use the DOS operating
system; 16-bit microcontrollers, such as the 8096 and the 80C196; and 8-bit
microcontrollers, such as the MCS(R)51 microcontroller family. The Company
introduced several embedded products in 1993 including the Intel386 CX and EX
chips, the 87C196MD controller for motor control applications, and the small
82078 floppy disk controller targeted for PC notebooks.

MEMORY CHIPS. Memory components are used to store computer programs and data
entered by users. Flash memories are nonvolatile and do not require power to
retain information.

Intel supplies a broad line of flash memory components. The Company's newest
generation of flash memory products is designed for sub-notebook and handheld
computers and communication devices in addition to many embedded applications.
Flash memory chips are serving as disk drive replacements in the mobile market,
storing the BIOS (basic input/output software) that controls the basic
operation of mobile and desktop systems and other software that controls
circuitry in both mobile and desktop systems, and meeting many embedded data
storage needs.

In 1993, Intel introduced 16- and 32-Mbit flash chips; 4-, 20- and 40-Mbyte
flash cards; and 5- and 10-Mbyte flash drives.

COMPUTER MODULES AND BOARDS. Hundreds of microcomputer platforms and
single-board computers based on Intel components are now widely accepted as
basic building blocks for technical and commercial applications. Many OEMs
build their own PCs, microcomputers, real-time control systems and other
products based on these modules.

NETWORK AND COMMUNICATION PRODUCTS. Sold to PC users through retail channels,
these hardware and software products improve the performance or capabilities of
PC systems and networks.

Some Intel products make PC networks easier for LAN administrators to install
and manage. When PC users install other cards and software, their systems are
able to access online services and transmit information to and from fax
machines or other PC faxmodems.

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Supporting a "smart network" services strategy are new or upgraded LAN
products: EtherExpress(TM) LAN adapters that use flash memory for one-step
installation and configuration; StorageExpress(TM) back up servers; NET
SatisFAXtion(R) software; NetportExpress(TM) print servers; and LANDesk(TM)
Manager software that combines management of desktop systems, servers, wire
segments and services on LANs. In 1993, Intel also introduced the Intel
wireless modem, the Value Line faxmodems and three credit-card-size Intel
PCMCIA (PC Memory Card International Association) faxmodems.

PERSONAL CONFERENCING PRODUCTS. PC users can install Intel software and cards
that let two users view and manipulate the same documents simultaneously and,
in some cases, see the other user. Personal conferencing products merge the
power of the PC with the real-time immediacy of the telephone. Intel
introduced its ProShare(TM) personal conferencing products, including the
ProShare Video System 200, in early 1994.

PARALLEL SUPERCOMPUTERS. The fastest computer systems available, supercomputers
are intended to solve the most computationally intensive problems. Parallel
supercomputers use the processing power of multiple microprocessors working
simultaneously. Intel offers two lines of parallel supercomputers: the
iPSC(R)/860 supercomputer, based on up to 128 i860(TM) XR microprocessors; and
the Paragon(TM) XP/S massively parallel supercomputer, with up to 4,000 i860 XR
microprocessors working together.

MANUFACTURING

Intel's domestic facilities in Chandler, Arizona; Aloha and Hillsboro, Oregon;
Las Piedras, Puerto Rico; Santa Clara and Folsom, California; and Rio Rancho,
New Mexico conduct most of the Company's VLSI (very-large-scale-integration)
wafer production, some product assembly and final testing, and most production
of microcomputers and memory boards and systems.

Outside of the United States, a significant and growing portion of Intel's VLSI
wafer manufacturing, including some Intel486 microprocessor production, is
conducted at fabrication plants in Jerusalem, Israel and Leixlip, Ireland. A
significant portion of Pentium processor production is planned for the Ireland
site, which opened in early 1994. Most of Intel's VLSI component assembly and
testing is conducted at facilities in Penang, Malaysia and Manila, Philippines.
Some production of microcomputers and memory boards and systems is conducted at
another Leixlip, Ireland plant.

To augment capacity, Intel uses subcontractors to perform assembly of certain
products and wafer fabrication for certain VLSI components, including flash
memory. The Company cannot give assurances that it will be able to fully
satisfy demand for certain of its products.

The manufacture of integrated circuits is a complex process. Normal
manufacturing risks include errors in the fabrication process, defects in raw
materials, as well as other factors, all of which can affect yields.

In general, if Intel were unable to assemble, test, or perform wafer
fabrication on its products abroad, or if air transportation between its
foreign facilities and the United States were disrupted, there could be a
materially 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

<PAGE> 5
controls and fluctuations, and tariff and import restrictions. To date, Intel
has not experienced significant difficulties related to these foreign business
risks.

4
<PAGE> 6
EMPLOYEES

At December 25, 1993, the Company employed approximately 29,500 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 in the United States and overseas. 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. Sales of Intel products
during 1993 were made to many thousands of customers worldwide, one of which,
International Business Machines Corp., accounted for 10% of total revenues.

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.
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 price, performance, availability and quality. 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
markets. Intel is engaged in a rapidly advancing field of technology in which
its ability to compete depends upon the continuing improvement of its products,
continuing cost reductions, and the development of new products to meet
changing customer requirements.

Prices decline rapidly in the semiconductor industry as unit volume grows, as
competition develops, and as production experience is accumulated. In the
microcomputer and memory boards and systems area, Intel competes with component
manufacturers and microprocessor-based computer manufacturers. Some of these
competitors are also Intel customers.

5
<PAGE> 7

A number of competitors have developed products that imitate some of
the Company's key products, including the Intel486 and Intel386 microprocessor
families. Some of these products obtained market acceptance and Intel's
revenues and margins with respect to certain of these products were adversely
affected. In addition, other competitors have indicated their intention to
develop imitations of the Pentium processor. On March 10, 1994, a jury
returned a verdict in favor of Advanced Micro Devices, Inc. ("AMD") regarding
AMD's right to copy certain microcode. (See "Legal Proceedings.") Intel
intends to appeal the verdict. If AMD ultimately prevails in its position that
it has a license to use Intel microcode (rather than having to develop its own
microcode independently), AMD will be able to more easily develop and ship
imitations of certain Intel products, including Intel microprocessors. In
February 1994, the Company settled a lawsuit with Cyrix Corp. under which the
Company dismissed certain patent infringement claims and granted certain
licenses. The Company also faces significant competition from companies that
offer rival microprocessor architectures. The Company cannot predict whether
such rival architectures will gain market acceptance or provide increased
competition to the Company's products. The Company continues to believe that
its Intel486 microprocessors will follow a normal price maturity curve, but
some distortion could occur if imitation products enter the market in
significant volume or alternative architectures gain market acceptance.

It continues to be Intel's strategy to maintain its competitive advantage
through the development and marketing of advanced products which provide
greater functionality to its customers than is provided by competitive
products. 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 imitative or of rival
architectural designs) or reduce prices on existing products. Such
developments could have an adverse effect on Intel's revenues and margins.

RESEARCH AND DEVELOPMENT

The Company's competitive position has developed to a large extent because of
its emphasis upon research and development. This emphasis has enabled Intel to
deliver 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 towards developing new products and improving existing
products and lowering their cost. Intel's expenditures for research and
development were $970, $780 and $618 million in fiscal years 1993, 1992 and
1991, respectively. As of December 25, 1993, Intel had approximately 6,200
employees engaged in research and development. The results of Intel's research
and development 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 VLSI components and systems is performed at
Intel's facilities in Santa Clara and Folsom, California; Aloha and Hillsboro,
Oregon; Chandler, Arizona; and Haifa, Israel. The Company also has design
facilities in Tsukuba, Japan.

INTELLECTUAL PROPERTY AND LICENSING

Intellectual property rights which 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 all of 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 captions
"Competition" and "Management's Discussion and Analysis of Financial Condition
and Results of Operations."

6
<PAGE> 8

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

Intel protects many of its computer programs by copyrighting the programs.
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 sign a software license contract before providing a customer with certain
computer programs. Certain VLSI components have computer programs embedded in
them, and Intel has obtained copyright protection for some of these computer
programs as well.

Beginning in 1985, 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 OEM manufacturers 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
patent 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 or
that the terms of any offered licenses will be acceptable to Intel or that in
all cases the dispute will be resolved without litigation.

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 Item 3.,
Legal Proceedings, of this Form 10-K.

<PAGE> 9
EXECUTIVE OFFICERS

The following sets forth certain information with regard to executive officers
of Intel (ages are as of December 25, 1993):

Craig R. Barrett (age 54) has been Chief Operating Officer since 1993, a
director of Intel Corporation since 1992, and Executive Vice President since
1992; and Vice President and General Manager of the Microcomputer Components
Group from 1989 to 1992.

Andrew S. Grove (age 57) has been a director of Intel Corporation since 1974,
President since 1979 and Chief Executive Officer since 1987.

Gordon E. Moore (age 65) has been a director of Intel Corporation since 1968
and Chairman of the Board of Intel Corporation since 1979.

Leslie L. Vadasz (age 57) has been a director of Intel Corporation since 1988
and Senior Vice President, Director of Corporate Business Development since
1991; and Senior Vice President and General Manager of the Systems Group from
1986 to 1990.

Frank C. Gill (age 50) has been Senior Vice President and General Manager,
Intel Products Group since 1991; Senior Vice President and President of the
Systems Group from 1990 to 1991; Senior Vice President and Director of Sales
from 1989 to 1990; and Vice President and Director of Sales from 1987 to 1989.

David L. House (age 50) has been Senior Vice President and Director, Corporate
Strategy, since 1991; Senior Vice President and President of Microcomputer
Components Group from 1990 to 1991; and Senior Vice President and General
Manager, Microcomputer Components Group from 1987 to 1990.

Paul S. Otellini (age 43) has been Senior Vice President and General Manager,
Microprocessor Products Group, since January 1993; Vice President and General
Manager, Microprocessor Products Group from 1991 to 1992; Vice
President/General Manager, Micro Products Group from 1990 to 1991; Vice
President/Assistant to the President from 1989 to 1990; and Vice
President/General Manager, Folsom Microcomputer Division from 1988 to 1989.

Gerhard H. Parker (age 50) has been Senior Vice President and General Manager,
Technology & Manufacturing Group since 1992; Vice President and Director,
Technology & Manufacturing Group from 1991 to 1992; Vice President and
Director, Technology Group from 1990 to 1991; Vice President and General
Manager, Technology and Manufacturing Group during 1990; Vice President and
General Manager, Component Technology and Development Group from 1989 to 1990;
and Vice President and Director of Technology Development from 1979 to 1989.

Robert W. Reed (age 47) has been Senior Vice President and General Manager,
Semiconductor Products Group since 1991; Senior Vice President and Chief
Financial Officer from 1990 to 1991; Senior Vice President, Chief Financial
Officer and Director of Administration from 1989 to 1990; and Vice President,
Chief Financial Officer and Director of Administration from 1987 to 1989.

Ronald J. Whittier (age 57) has been Senior Vice President and General Manager,
Architecture and Software Technology Group since January 1993; Vice President
and General Manager, Software Technology Group from 1991 to 1992; Vice
President and Director of Marketing from 1990 to 1991; and Vice President and
Director of Corporate Marketing from 1985 to 1990.

8
<PAGE> 10

Albert Y.C. Yu (age 52) has been Senior Vice President and General Manager,
Microprocessor Products Group, since January 1993; Vice President and General
Manager, Microprocessor Products Group from 1991 to 1992; Vice President and
General Manager, Micro Products Group from 1990 to 1991; Vice President and
General Manager, Component Technology and Development Group from 1989 to 1990;
and Vice President/General Manager, Development, Microcomputer Components Group
from 1987 to 1989.

Michael A. Aymar (age 46) has been Vice President and General Manager, Intel
486(TM) Microprocessor Division since January 1994; Vice President and General
Manager, Mobile Computing Group, from 1991 to 1994; Vice President/General
Manager, Santa Clara Microcomputer Division from 1989 to 1991; Vice President,
Component Technology & Development Group; and Director, Design Technology from
1988 to 1989.

Andy D. Bryant (age 43) has been Vice President and Chief Financial Officer
since February 1994; Vice President, Intel Products Group from 1990 to 1994;
and Director of Finance from 1987 to 1990.

F. Thomas Dunlap, Jr. (age 42) has been Vice President, General Counsel and
Secretary since 1987.

G. Carl Everett (age 43) has been Vice President and Director, Worldwide Sales
Group since 1990; Vice President and Director of North American Sales during
1990; and Vice President, Sales and Marketing Group from 1987 to 1990.

Kenneth B. Fine (age 52) has been Vice President and General Manager,
Semiconductor Products Group since January 1993; Vice President/General
Manager, Multimedia and Supercomputing Components Group from 1991 to 1992; Vice
President/General Manager, Embedded Controller and Memory Group from 1990 to
1991; and General Manager, Chandler Microcomputer/ASIC Division from 1988 to
1990.

Harold E. Hughes, Jr. (age 47) has been Vice President and Director of Planning
since February 1994; Vice President and Chief Financial Officer from 1991 to
1994; Vice President and Controller, Microcomputer Components Group from 1990
to 1991; Vice President and Director of Business Development, Microcomputer
Components Group during 1990; and Vice President and Director of Business
Development, Component Technology and Development Group from 1988 to 1990.

9
<PAGE> 11
ITEM 2. PROPERTIES

At December 25, 1993, Intel owned the major facilities described below:
<TABLE>
<CAPTION>
No. of
Bldgs. Location Total Sq. Ft. Use
------ -------- ------------- ---
<S> <C> <C> <C>
40 United States (A) 6,805,000 Executive and administrative offices, wafer fabrication, components testing
and assembly, research and development, computer and service functions,
system assembly, and warehousing.

2 Ireland 688,000 Wafer fabrication, system and board assembly, and administrative offices.

4 Israel 379,000 Wafer fabrication, design center, sales office and related support
functions.

5 Malaysia (B) 354,000 Components assembly and testing and administrative offices.

4 Puerto Rico 292,000 Systems manufacturing, board assembly, warehousing and administration.

3 England 184,000 European sales, marketing, warehousing and related support functions.

3 Japan 154,000 Design center, sales, warehousing and related support functions.

1 Philippines (C) 98,000 Components assembly and testing and administrative offices.

1 Germany 86,000 European marketing, German sales and administrative offices.

1 France 63,000 French sales and administrative offices.
</TABLE>

At December 25, 1993, Intel also leased 18 major facilities in the U.S.
totaling approximately 1,388,000 square feet and 6 facilities in other
countries totaling approximately 169,000 square feet. These leases expire at
varying dates through 2002, including renewals at the option of Intel.

Intel believes that its existing facilities are suitable and adequate, and the
productive capacity in such facilities is in general being utilized. Intel has
other facilities available that it can equip to meet future demand as such
demand materializes. These include 2.7 million square feet of building space
under various stages of construction in the United States and abroad for
manufacturing and administration purposes. The Company has plans for an
additional 1.3 million square feet of manufacturing building space in the
United States.
______________________________

(A) Includes an idle, 131,000 square foot facility formerly utilized for wafer
fabrication and administration, that is currently for sale.
(B) The lease on a portion of the land used for these facilities expires in
2032.
(C) Leases on land expire in 1998, 2002 and 2008.

10
<PAGE> 12

ITEM 3. LEGAL PROCEEDINGS

A. LITIGATION
Intel v. Advanced Micro Devices ("AMD")
U.S. District Court for the Northern District of California
(C90-20237) - Intel287(TM) Copyright Infringement Suit

In a letter dated March 23, 1990 from AMD, AMD asserted a right to copy and
distribute Intel-copyrighted microcode in an AMD 80287 math coprocessor. In
response to the letter, Intel filed a suit on April 23, 1990 in the U.S.
District Court for the Northern District of California, alleging that AMD
infringed Intel's copyright on the microcode for the Intel287 math coprocessor.
In its defense, AMD claimed a license to copy and distribute Intel copyrighted
microcode based on a clause in a 1976 patent cross license agreement which
gives AMD the right "...To copy microcodes contained in Intel microcomputers
and peripheral products sold by Intel."

On June 17, 1992, a jury rendered its verdict that AMD did not prove that the
1976 copyright license, which AMD was using as a defense in the case, covered
the Intel287 math coprocessor.

On April 15, 1993, Judge Ingram granted AMD a new trial in this case. The
judge ruled that Intel's failure to disclose and produce a press release and
related documents during the discovery phase of the trial was grounds for a new
trial. The ruling overturned the jury verdict and a subsequent ruling by Judge
Ingram that AMD did not have the right under this agreement to distribute
products containing Intel microcode.

On March 10, 1994, a second jury found that AMD does have a license to copy
microcode in Intel microprocessors and peripheral products. Intel intends to
appeal this second verdict as well as ask the court to reinstate the original
verdict.

If AMD ultimately prevails and maintains the right to copy and distribute Intel
microcode (rather than having to develop its own microcode independently), AMD
will be able to sell products which more closely imitate Intel products,
including microprocessors. Any such right could continue through December 31,
1995. However, AMD is expected to claim that any such microcode right
continues beyond termination of the agreement on December 31, 1995.

Intel v. Advanced Micro Devices, Inc. ("AMD")
U.S. District Court for the Northern District of California
(C92-20039, C93-20301) - Intel386(TM)/Intel486(TM) Copyright Infringement Suit

On October 9, 1991, Intel filed another copyright infringement suit against AMD
in which Intel alleges that AMD copied the Intel386 microcode and a control
program which is stored in a programmable logic array. Intel has asked for
over $600 million in damages.

AMD filed a motion with the court to stay this case pending the outcome of
Intel's appeal of an arbitrator's award in a state court action. On October
29, 1992, Judge Patricia Trumbull granted AMD's motion to stay this case
pending the outcome of the state court appeal. On December 28, 1993, the Court
of Appeals for the Ninth Circuit reversed the stay. AMD has yet to file a
petition for certiorari with respect to the Court of Appeals decision.

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<PAGE> 13
This action has been consolidated with the Intel386 suit against AMD for
discovery purposes. These suits cover certain copyright infringement claims on
AMD's versions of Intel386 and Intel486 microprocessors and relate to both
allegedly copied microcode and what AMD claims are various clean room versions
of the microcode, as well as other copyrighted programs. The complaint seeks
equitable relief, damages and declaratory relief including interpretation of
various contract clauses. A trial on the in-circuit-emulation microcode
contained on those products is expected in April 1994.

Advanced Micro Devices, Inc. ("AMD") v. Intel Corporation
U.S. District Court for the Northern District of California
(C91-20541) - Antitrust Suit

On August 29, 1991, AMD filed a lawsuit against Intel in the U.S. District
Court, Northern District of California. In this lawsuit, AMD alleges that
Intel violated the Sherman Act by committing unlawful acts and conspiring with
customers and distributors to secure and maintain monopoly positions in
microprocessor and math coprocessor markets. AMD seeks $2 billion in actual
damages and is requesting treble damages under the antitrust laws. Intel's
motion to dismiss a portion of AMD's allegations was granted on December 17,
1991 and AMD's motion for reconsideration of that decision has been denied.
Intel's summary judgement motion to dismiss AMD's claim that Intel filed sham
litigation was granted on March 4, 1994.

A trial date is currently set for October 1994. Intel denies the charges and
intends to continue to defend these allegations vigorously.

Although the ultimate outcome of these claims 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
condition.

B. ENVIRONMENTAL PROCEEDINGS

Intel has been named to the California and Federal Superfund lists for three of
its sites and has completed, along with two other companies, a Remedial
Investigation/Feasibility study with the Federal Environmental Protection
Agency (EPA) to evaluate the ground water in areas adjacent to its Mountain
View, California site. The EPA has issued a Record of Decision with respect to
a groundwater cleanup plan at that site. Under the California and Federal
Superfund statutes, liability for cleanup of the Mountain View site and
adjacent area is joint and several. The Company has reached agreement in
principle with those same two companies which should significantly limit the
Company's liabilities under the proposed cleanup plan. The EPA has negotiated
a consent decree with Intel and one of the other two companies referenced above
which specifies the cleanup activities for which Intel and the other company
will be responsible. The EPA has also issued a cleanup order to the third
company and seven other companies specifying cleanup activities to be completed
by these eight companies which are complementary to those specified in the
consent decree. 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 would not have a
material adverse effect on the Company's financial position, even if joint and
several liability were to be assessed.

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

None.

<PAGE> 14
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 the
caption "Financial Information by Quarter (Unaudited)" on page
23 of the Registrant's Annual Report to Stockholders and to
the information regarding the stockholders' rights plan
appearing on pages 10 and 11 of the Registrant's Annual Report
to Stockholders under the caption "Common Stock," which
information is hereby incorporated by reference.

(b) As of February 26, 1994, there were 38,341 holders of record
of the Registrant's Common Stock.

ITEM 6. SELECTED FINANCIAL DATA

Reference is made to the information regarding selected financial data for the
fiscal years 1989 through 1993, including the related footnotes, under the
caption "Financial Summary" on page 20 of the Registrant's 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 25, 1993 are as follows:
<TABLE>
<CAPTION>
Fiscal Year
_________________________________________________________________________

<S> <C> <C> <C> <C>
1989 1990 1991 1992 1993

5.9x 9.2x 12.4x 20.7x 54.4x
</TABLE>

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

13
<PAGE> 15

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

Reference is made to the information appearing under the caption "Management's
Discussion and Analysis of Financial Condition and Results of Operations" on
pages 21 through 23 of the Registrant's 1993 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 25, 1993 and
December 26, 1992 and for each of the three years in the period ended December
25, 1993 and the Report of Independent Auditors thereon and Intel Corporation's
unaudited quarterly financial data for the two year period ended December 25,
1993 are incorporated by reference from the Registrant's 1993 Annual Report to
Stockholders, on pages 6 through 23.

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

Not applicable.

14
<PAGE> 16
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 caption "Election of Directors" on pages 2 and 3 in the
Registrant's Proxy Statement dated March 21, 1994, which information is hereby
incorporated by reference, and to the information under the caption "Executive
Officers" in Part I hereof.

ITEM 11. EXECUTIVE COMPENSATION

Reference is made to the information appearing under the captions "Executive
Compensation," "Directors' Compensation," and "Compensation Committee
Interlocks and Insider Participation," on pages 7 through 10 of the
Registrant's Proxy Statement dated March 21, 1994, 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 Registrant's Proxy Statement
dated March 21, 1994, under the caption "Security Ownership of Certain
Beneficial Owners and Management," on pages 12 and 13, which information is
hereby incorporated by reference.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Reference is made to the information appearing under the caption "Certain
Relationships and Related Transactions" on page 13 of the Registrant's Proxy
Statement dated March 21, 1994, which information is hereby incorporated by
reference.

15
<PAGE> 17
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 Schedules

The financial statement schedules listed in the
accompanying index to financial statements and
financial statement schedules are 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

No reports on Form 8-K were filed during the fourth quarter
of the fiscal year covered by this filing.

16
<PAGE> 18
INDEX TO FINANCIAL STATEMENTS
AND FINANCIAL STATEMENT SCHEDULES
(ITEM 14 (A))
<TABLE>
<CAPTION>
Reference Page
------------------
1993
Annual
Form Report to
10-K Stockholders
<S> <C> <C>
Consolidated Balance Sheets-
December 25, 1993 and December 26, 1992 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Consolidated Statements of Income for
the years ended December 25, 1993,
December 26, 1992 and December 28, 1991 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Consolidated Statements of Stockholders'
Equity for the years ended December 25, 1993,
December 26, 1992 and December 28, 1991 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Consolidated Statements of Cash Flows
for the years ended December 25, 1993 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
December 26, 1992 and December 28, 1991
Notes to Consolidated Financial Statements-
December 25, 1993, December 26, 1992 and
December 28, 1991 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10-18
Report of Independent Auditors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Supplementary Information (unaudited)
Financial Information by Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Schedules for years ended December 25, 1993,
December 26, 1992 and December 28, 1991
I- Marketable Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
II- Amounts Receivable from Directors,
Officers and Employees . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
V- Property, Plant and Equipment . . . . . . . . . . . . . . . . . . . . . . . . . 22
VI- Accumulated Depreciation, Depletion and
Amortization of Property, Plant and Equipment . . . . . . . . . . . . . . . . . 23
VIII- Valuation and Qualifying Accounts and Reserves . . . . . . . . . . . . . . . . 24
IX- Short-Term Borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
X- Supplementary Income Statement Information . . . . . . . . . . . . . . . . . . 26
</TABLE>

All other schedules have been omitted since the required information is not
present or not present in amounts sufficient to require submission of the
schedule or because the information required is included in the consolidated
financial statements or notes thereto.

The consolidated financial statements listed in the above index which are
included in the Registrant's 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 5, 6, 7, and 8 of
this Form 10-K, the 1993 Annual Report to Stockholders is not to be deemed
filed as part of this report.

Page references to the 1993 Annual Report to Stockholders relate to the bound,
printed version of the report.

17
<PAGE> 19

INTEL CORPORATION

SCHEDULE I - MARKETABLE SECURITIES

At December 25, 1993
(In Millions of Dollars)

<TABLE>
<S> <C>
Short-Term Marketable Securities (A) 1993
- -------------------------------- ----
Time Deposits (B) $232
Corporate Bonds (primarily rated P1 or better by Moody's) 226
Repurchase Agreements 171
Securities of Foreign Governments 170
Certificates of Deposit 144
Commercial Paper 135
Floating Rate Notes 100
Preferred Stock 94
Hedged Equity 89
Asset Backed 48 .
Municipal Obligations 35
Collateralized Mortgage Obligations 33
------
Total Short-Term Marketable Securities $1,477
======

Long-Term Marketable Securities (A)
- -------------------------------
Securities of Foreign Governments (C) $309
Corporate Bonds (primarily rated A2 or better by Moody's) (D) 267
Hedged Equity 186
Preferred Stock and Other Equity 136
Loan Participations 115
Fixed Rate Notes and Certificates of Deposit 115
Collateralized Mortgage Obligations 93
Floating Rate Notes and Certificates of Deposit 63
Securities of the U.S. Government and its Agencies 62
Municipal Obligations 35
Asset Backed 25
Repurchase Agreements 10
------
Total Long-Term Marketable Securities $1,416
======
</TABLE>

(A) Stated at cost which approximates market. No individual security or
group of securities of an issuer exceeds 2% of total assets except for
the bonds noted at (C), below.

(B) Includes $31 million deposited with Mitsubishi Bank.

(D) Includes $44 million issued by Osaka Gas Company.

18
<PAGE> 20

INTEL CORPORATION

SCHEDULE II-AMOUNTS RECEIVABLE FROM DIRECTORS, OFFICERS AND EMPLOYEES

Year Ended December 25, 1993
(In Thousands of Dollars)

<TABLE>
<CAPTION>
Balance Receivable
Balance at Close of Period
Receivable at ------------------
Beginning Reclassi- Current Noncurrent
of Period fications Additions Collections Assets Assets
--------- --------- --------- ----------- ------ ------
<S> <C> <C> <C> <C> <C> <C>
Amounts Receivable
From Employees: $2,425 $ -- $1,257 $(1,732) 200 (A) $1,750 (A)
------ --------- ------ -------- --- ------

Amounts Receivable
From Officers:

Kenneth B. Fine
6% interest,
due 4/93 -- -- 500 (500) -- --

G. Carl Everett
0% interest,
due 1/93 75 -- -- (75) -- --
-- -- -- ---- -- --

Amounts Receivable
From Officers: 75 -- 500 (575) -- --
------ ------- ------ -------- ----- ------

Total $2,500 $ -- $1,757 $(2,307) $200 $1,750
====== ======= ====== ======== ==== ======
</TABLE>

(A) Year end balance represents fourteen loans at zero to 7% interest granted
to employees, none of whom is an officer or a director. These loans
expire at varying dates through 1998 and are secured by real property.
During the year ended December 25, 1993, ten loans were granted to
employees and twelve were repaid.

19
<PAGE> 21

INTEL CORPORATION

SCHEDULE II-AMOUNTS RECEIVABLE FROM DIRECTORS, OFFICERS AND EMPLOYEES

Year Ended December 26, 1992
(In Thousands of Dollars)

<TABLE>
<CAPTION>
Balance Receivable
Balance at Close of Period
Receivable at ------------------
Beginning Current Noncurrent
of Period Additions Collections Assets Assets
--------- --------- ----------- ------ ------
<S> <C> <C> <C> <C> <C>
Amounts Receivable
From Employees: $3,140 $ 752 $(1,467) $425 (B) $2,000 (B)
------ ----- -------- ----- ------

Amounts Receivable
From Officers:

Michael A. Aymar
7% interest,
due 10/94 125 -- (125) -- --

G. Carl Everett
0% interest,
due 1/93 75 -- -- 75 --
----- ------ ------- ---- ----

Amounts Receivable
From Officers: 200 -- (125) 75 --
------ ------ --------- ----- ----

Total $3,340 $752 $(1,592) $500 $2,000
====== ==== ======== ==== ======
</TABLE>

(B) Year end balance represents sixteen loans at zero to 7% interest granted
to employees, none of whom is an officer or a director. These loans
expire at varying dates through 1997 and are secured by real property.
During the year ended December 26, 1992, five loans were granted to
employees and eight were repaid.

20
<PAGE> 22

INTEL CORPORATION

SCHEDULE II-AMOUNTS RECEIVABLE FROM DIRECTORS, OFFICERS AND EMPLOYEES

Year Ended December 28, 1991
(In Thousands of Dollars)

<TABLE>
<CAPTION>
Balance Receivable
Balance at Close of Period
Receivable ------------------
Beginning Reclassi- Current Noncurrent
of Period fications Additions Collections Assets Assets
--------- --------- --------- ----------- ------ ------
<S> <C> <C> <C> <C> <C> <C>
Amounts Receivable
From Employees: $2,404 $(214) (D) $ 2,028 $ (1,078) $460 (C) $2,680 (C)
------ ------- --------- --------- ----- -------

Amounts Receivable
From Officers:

Carlene M. Ellis
3-6% interest, due 3/95 150 (150) (D) -- -- -- --

David L. House
0% interest, due 4/92 100 -- -- (100) -- --

G. Carl Everett
0% interest, due 1/93 75 -- -- -- -- 75

Paul S. Otellini
6% interest, due 7/91 -- 200 (D) -- (200) -- --

Michael A. Aymar
7% interest, due 10/94 -- 164 (D) -- (39) -- 125
--- ----- ---------- -------- ------ -----

Amounts Receivable
From Officers: 325 214 -- (339) -- 200
--- ---- ---------- -------- ------ -----
Total $2,729 $ -- $ 2,028 $(1,417) $460 $2,880
====== ======= ========== ======== ====== ======
</TABLE>

(C) Year end balance represents nineteen loans at zero to 7% interest granted
to employees, none of whom is an officer or a director. These loans
expire at varying dates through 1997 and are secured by real property.
During the year ended December 28, 1991, eleven loans were granted to
employees and seven were repaid.

(D) Amounts Receivable from Officers includes only amounts outstanding during
service as an executive officer; at other times, balances are classified
as Amounts Receivable from Employees.

21
<PAGE> 23

INTEL CORPORATION

SCHEDULE V - PROPERTY, PLANT AND EQUIPMENT

Years Ended December 28, 1991, December 26, 1992 and December 25, 1993
(In Millions of Dollars)

<TABLE>
<CAPTION>
Transfers,
Reclassi-
Balance at fications Balance
Beginning Additions Retirements and Other at End
of Year at Cost and Sales In (Out) of Year
----------- -------- --------- ---------- -------
<S> <C> <C> <C> <C> <C>
1991

Land and Buildings $ 961 $ 25 $ (12) $ 124 $1,098
Machinery and Equipment 1,765 596 (103) 30 2,288
Construction in Progress 88 327 (3) (154) 258
------ ---- -------- ----- ---
$2,814 $948 $(118) $ -- $3,644
------ ---- -------- ------- ------

1992

Land and Buildings $1,098 $ 53 $ (14) $ 326 $1,463
Machinery and Equipment 2,288 771 (208) 23 2,874
Construction in Progress 258 404 (2) (349) 311
--- --- --- ----- ---
$3,644 $1,228 $ (224) $ -- $4,648
------ ------ ------- ------- ------

1993
Land and Buildings $1,463 $ 41 $ (24) $ 368 $1,848
Machinery and Equipment 2,874 1,329 (244) 189 4,148
Construction in Progress 311 563 -- (557) 317
--- --- ------- ----- ---
$4,648 $1,933 $ (268) $ -- $6,313
------ ------ ------- ------ ------
</TABLE>

Annual depreciation and amortization provisions have been computed based upon
the following estimated lives:

Buildings and Improvements . . . . . . . . . . . . 8 to 45 years
Machinery and Equipment. . . . . . . . . . . . . . 2 to 4 years

22
<PAGE> 24

INTEL CORPORATION

SCHEDULE VI - ACCUMULATED DEPRECIATION, DEPLETION AND AMORTIZATION OF
PROPERTY, PLANT AND EQUIPMENT

Years Ended December 28, 1991, December 26, 1992 and December 25, 1993
(In Millions of Dollars)

<TABLE>
<CAPTION>
Additions Transfers,
Balance at Charged to Reclassi- Balance
Beginning Costs and Retirements fications at End
of Year Expenses and Sales and Other of Year
---------- -------- ---------- --------- -------
<S> <C> <C> <C> <C> <C>
1991

Buildings and Improvements $ 227 $ 59 $ (2) $--- $ 284
Machinery and Equipment 929 359 (91) --- 1,197
------ ---- ----- --- -----
$ 1,156 $ 418 $ (93) $--- $ 1,481
------ ---- ----- ---- ------

1992

Buildings and Improvements $ 284 $ 94 $ (7) $--- $ 371
Machinery and Equipment 1,197 424 (160) --- 1,461
------ ----- ----- --- ------
$ 1,481 $ 518 $ (167) $--- $ 1,832
------ ----- ----- ---- ------

1993
- ----

Buildings and Improvements $ 371 $ 106 $ (17) $--- $ 460
Machinery and Equipment 1,461 611 (215) --- 1,857
----- ----- ------ --- ------
$ 1,832 $ 717 $ (232) $--- $ 2,317
------ ----- ------ ---- ------
</TABLE>

23
<PAGE> 25

INTEL CORPORATION

SCHEDULE VIII - VALUATION AND QUALIFYING ACCOUNTS AND RESERVES

Years Ended December 28, 1991, December 26, 1992 and December 25, 1993
(In Millions of Dollars)

<TABLE>
<CAPTION>
Additions
Balance at Charged to Balance
Beginning Costs and at End
of Year Expenses Deductions (A) of Year
---------- ---------- -------------- -------
<S> <C> <C> <C> <C>
1991

Allowance for Doubtful Receivables $8 $3 $2 $9
-- -- -- --

1992

Allowance for Doubtful Receivables $9 $29 $12 $26
-- ---- --- ---

1993

Allowance for Doubtful Receivables $26 $4 $8 $22
--- -- -- ---
</TABLE>

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

24
<PAGE> 26

INTEL CORPORATION

SCHEDULE IX - SHORT-TERM BORROWINGS

Years Ended December 28, 1991, December 26, 1992 and December 25, 1993
(In Millions of Dollars)

<TABLE>
<CAPTION>
Weighted Average Weighted
Balance Average Maximum Amount Borrowings Average
at End Interest Rate Outstanding Outstanding Interest Rate
of Year at End of Year at any Month End During the Year During the Year
------- -------------- ---------------- ------------------- ---------------
<S> <C> <C> <C> <C> <C>
Short-Term
Borrowings:

1991
Banks: $164 6.6% $176 $156 5.6%
---- ----- ---- ---- ----
Commercial Paper: $ -- -- $693 $550 6.2%
---- ----- ---- ---- ----

1992
Banks: $193 14.1% $281 $197 5.3%
---- ----- ---- ---- -----
Commercial Paper: $ 6 3.5% $689 $558 3.8%
---- ----- ---- ---- ----

1993
Banks: $397 6.2% $495 $300 6.3%
---- ----- ---- ---- ----
Commercial Paper: $ -- -- $700 $495 3.2%
---- ----- ---- ---- ----
</TABLE>

Short-term borrowings from banks at December 28, 1991 includes $121 million
borrowed under foreign and domestic lines of credit and $43 million borrowed
under other arrangements.

Short-term borrowings from banks at December 26, 1992 includes $126 million
borrowed under foreign and domestic lines of credit and $67 million borrowed
under other arrangements. The year-end interest rate on bank borrowings is
high due to a foreign currency borrowing of $32 million at an average rate of
34.2% to hedge certain net assets in that currency.

Short-term borrowings at December 25, 1993 includes $85 million borrowed under
foreign and domestic lines of credit, $197 million borrowed under reverse
repurchase agreements, and $115 million borrowed under other arrangements.

The weighted average interest rate during the year equals interest expense
divided by average borrowings outstanding.

Average borrowings outstanding is calculated on the basis of daily balances.

25
<PAGE> 27

INTEL CORPORATION

SCHEDULE X - SUPPLEMENTARY INCOME STATEMENT INFORMATION

Years Ended December 28, 1991, December 26, 1992 and December 25, 1993
(In Millions of Dollars)

<TABLE>
<CAPTION>
1991 1992 1993
---- ---- ----
<S> <C> <C> <C>
Maintenance and Repair $122 $167 $295
Advertising $139 $256 $325
</TABLE>

Items omitted if less than one percent of total revenues or separately reported
in financial statements in Registrant's Annual Report to Stockholders.

26
<PAGE> 28

INDEX TO EXHIBITS

(Item 14 (a))

Description

3.1 Intel Corporation Certificate of Incorporation (incorporated by
reference to Exhibit 3.1 of Registrant's Form 10-Q for the
quarter ended June 26, 1993 (Commission File No. 0-6217) as filed
on August 10, 1993).

3.2 Intel Corporation Bylaws as amended, (incorporated by reference to
Exhibit 3.2 of Registrant's Registration Statement on Form 10-Q for
the quarter ended September 25, 1993 (Commission File No. 0-6217) as
filed on November 9, 1993).

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 (Commission File No. 0-6217) as filed on March 28, 1986).

4.2 Indenture dated as of May 1, 1985 among Intel Overseas Corporation,
Intel Corporation and Wachovia Bank Trust Company N.A. related to
$236,500,000 principal amount of zero coupon notes due 1995 issued by
Intel Overseas Corporation and guaranteed by Intel Corporation
(incorporated by reference to Exhibit 4.1 of Registrant's Form 10-Q
for the quarter ended June 29, 1985 (Commission File No. 0-6217) as
filed on August 13, 1985).

4.3 Rights Agreement dated as of May 1, 1989, as amended between the
Registrant and Harris Trust and Savings Bank (as successor Rights
Agent), together with Exhibit A, the form of Rights Certificate to be
distributed on the Distribution Date (incorporated by reference to
Exhibit 1 or Registrant's Form 8-A (Commission File No. 0-6217) as
filed on May 3, 1989), together with the First Amendment to Rights
Agreement dated as of January 17, 1994 and Amendment No. 2 to
Rights Agreement dated as of January 20, 1994.

4.4 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 (Commission File No. 0-6217) as
filed on March 25, 1993), together with the First Amendment to Warrant
Agreement dated as of October 18, 1993 and the Second Amendment to
Warrant Agreement dated as of January 17, 1994.

10.1 Intel Corporation 1979 Stock Option Plan as amended (incorporated by
reference to Exhibit 10.2 of Registrant's Form 10-K (Commission File
No. 0-6217) as filed on March 28, 1990).

10.2 Intel Corporation 1984 Stock Option Plan, as amended (incorporated by
reference to Exhibit 10.2 of Registrant's Form 10-Q for the quarter
ended June 26, 1993 (Commission File No. 0-6217) as filed on August
10, 1993).

10.3 Intel Corporation Profit-Sharing Retirement Plan dated April 20, 1990
as amended and restated effective January 1, 1989 (incorporated by
reference to Exhibit 10.3 of Registrant's Form 10-K (Commission File
No. 0-6217) as filed on March 26, 1992).

10.4 Second Amendment dated March 2, 1992 to Intel Corporation
Profit-Sharing Retirement Plan dated April 20, 1990 as amended and
restated effective January 1, 1989 (incorporated by reference to
Exhibit 10.4 of Registrant's Form 10-K (Commission File No. 0-6217)
as filed on March 26, 1993).

10.5 Intel Corporation Defined Benefit Pension Plan and Trust dated
September 7, 1988 as amended (incorporated by reference to Exhibit
10.5 of Registrant's Form 10-K (Commission File No. 0-6217) as filed
on March 28, 1990).

27
<PAGE> 29

10.6 Intel Corporation 1988 Executive Long Term Stock Option Plan as
amended (incorporated by reference to Exhibit 10.6 of Form 10-Q for
the quarter ended June 26, 1993 (Commission File No. 0-6217) as filed
on August 10, 1993).

10.7 Intel Corporation Sheltered Employee Retirement Plan Plus dated
December 1, 1991 (incorporated by reference to Exhibit 10.6
of Registrant's Form 10-K (Commission File No. 0-6217) as filed
on March 26, 1992).

10.8 Intel Corporation Executive Officer Bonus Plan dated January 1, 1994.

11.1 Computation of Per Share Earnings.

12.1 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 25, 1993 expressly incorporated by reference herein.

21. Intel Subsidiaries.

23. Consent of Ernst & Young, Independent Auditors.

28
<PAGE> 30
SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this Annual 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 22, 1994

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.

<TABLE>
<S> <C>
/s/ Craig R. Barrett /s/ Max Palevsky
-------------------- ----------------
Craig R. Barrett Max Palevsky
Director Director
March 22, 1994 March 22, 1994

/s/ Andy D. Bryant /s/ Arthur Rock
------------------ ---------------
Andy D. Bryant Arthur Rock
Vice President, Principal Director
Accounting and Chief Financial Officer March 22, 1994
March 22, 1994
/s/ Jane E. Shaw
----------------
/s/ Winston H. Chen Jane E. Shaw
-------------------
Winston H. Chen Director
Director March 22, 1994
March 22, 1994
/s/ Leslie L. Vadasz
--------------------
/s/ Andrew S. Grove Leslie L. Vadasz
-------------------
Andrew S. Grove Director
Principal Executive Officer March 22, 1994
President and Director
March 22, 1994 /s/ David B. Yoffie
-------------------
David B. Yoffie
/s/ D. James Guzy Director
-----------------
D. James Guzy March 22, 1994
Director
March 22, 1994 /s/ Charles E. Young
--------------------
Charles E. Young
/s/ Gordon E. Moore Director
-------------------
Gordon E. Moore March 22, 1994
Chairman of the Board
March 22, 1994
</TABLE>

<PAGE> 31

GRAPHICS APPENDIX LIST*

* In this Appendix, the following descriptions of graphs on pages 21 and 22 of
the Company's 1993 Annual Report to Stockholders that are omitted from the EDGAR
text are more specific with respect to the actual amounts and percentages than
can be determined from the graphs themselves.

The Company submits such more specific descriptions only for the purpose of
complying with EDGAR requirements for transmitting this Annual Report on Form
10-K; such more specific descriptions are not intended in any way to provide
information that is additional to that otherwise provided in the 1993 Annual
Report to Stockholders.

REVENUES AND INCOME
(Dollars in millions)

<TABLE>
<CAPTION>
1991 1992 1993
------ ------ ------
<S> <C> <C> <C>
Net Revenues 4,779 5,844 8,782
Net Income 819 1,067 2,295
</TABLE>

COSTS AND EXPENSES
(Percent of revenues)

<TABLE>
<CAPTION>
1991 1992 1993
------ ------ ------
<S> <C> <C> <C>
Cost of Sales 48% 44% 37%
R&D 13% 13% 11%
Marketing and G&A 16% 17% 13%
</TABLE>

OTHER INCOME AND EXPENSE
(Dollars in millions)

<TABLE>
<CAPTION>
1991 1992 1993
------ ------ ------
<S> <C> <C> <C>
Interest and Other Income 197 133 188
Interest Expense 82 54 50
</TABLE>

CASH AND INVESTMENTS
(Dollars in billions)

<TABLE>
<CAPTION>
1992 1993
------ ------
<S> <C> <C>
Cash and Cash Equivalents 1.84 1.66
Short-term Investments .99 1.48
Long-term Investments .50 1.42
</TABLE>

<PAGE> 1
EXHIBIT 4.3

FIRST AMENDMENT TO RIGHTS AGREEMENT

This First Amendment to that Rights Agreement dated as of May 1, 1989 between
Intel Delaware Corporation and The First National Bank of Boston (the
"Agreement"), is dated as of January 17, 1994 (the "Effective Date"), among
Intel Corporation, a Delaware corporation ("Intel") (formerly Intel Delaware
Corporation), The First National Bank of Boston, a national banking association
("Bank of Boston"), and Harris Trust and Savings Bank, an Illinois banking
corporation ("Harris").

Intel, Bank of Boston, and Harris agree as follows:

1. Bank of Boston shall have no further rights and obligations as Rights
Agent under the Agreement as of the Effective Date, provided, however,
that Bank of Boston shall continue to have the obligations of a
predecessor Rights Agent set forth in Section 21 of the Agreement,
including, without limitation, the obligation to provide reasonable
assistance for the orderly transfer of the duties as Rights Agent under
the Agreement to Harris and diligently to tender to Harris all documents,
records, and information regarding the Rights and the Agreement.

2. Harris shall assume all of the rights and obligations as Rights Agent
under the Agreement as of the Effective Date.

3. Section 1(e) is amended by deleting "the Commonwealth of Massachusetts"
and inserting in its place "Chicago, Illinois".

4. Section 1(f) is amended to read as follows: "'Close of Business' on any
given date shall mean 5:00 P.M., Chicago time, on such date; provided,
however, that if such date is not a Business Day it shall mean 5:00 P.M.,
Chicago time, on the next succeeding Business Day."

5. Section 3(c) is amended by deleting the reference to "The First National
Bank of Boston" and inserting in its place "Harris Trust and
Savings Bank".

6. Section 26 is amended by deleting:

"The First National Bank of Boston
P.O. Box 1865
Boston, Massachusetts 02105
Attention: Shareholder Services Division"
<PAGE> 2

and inserting in its place:

"Harris Trust and Savings Bank
P.O. Box 755
Chicago, Illinois 60690
Attention: Shareholder Services Division"

Except as otherwise expressly provided in this Amendment, all other terms of
the Agreement shall remain unchanged and shall continue in full force and
effect.

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed and delivered as of the day and year first above written.

<TABLE>
<S> <C>
Attest: INTEL CORPORATION

/s/ Suzanne Taaffe By: /s/ Thomas R. Lavelle

Attest: THE FIRST NATIONAL BANK OF BOSTON

/s/ Colleen Duran By: /s/ Kenyon Bissell

Attest: HARRIS TRUST AND SAVINGS BANK

/s/ Keith A. Bradley By: /s/ Richard C. Carlson
</TABLE>
<PAGE> 3
AMENDMENT NO. 2 TO RIGHTS AGREEMENT

This Amendment No. 2 to Rights Agreement is entered into effective as of
January 20, 1994 between Intel Corporation, a Delaware corporation ("Intel"),
and Harris Trust and Savings Bank, an Illinois banking corporation ("Harris").

WHEREAS, Intel entered into that certain Rights Agreement with The First
National Bank of Boston ("FNB") dated as of May 1, 1989 (the "Agreement");

WHEREAS, the Agreement was subsequently amended effective January 17, 1994 to
replace FNB with Harris as the Rights Agent (as defined in the Agreement);

WHEREAS, effective May 6, 1993 Intel's outstanding shares of Common Stock
were split 2-for-1 (the "Stock Split");

WHEREAS, on January 19, 1994 the Board of Directors amended the Agreement to
set the Purchase Price (as defined in the Agreement) at $260.00;

WHEREAS, there exists some ambiguity and inconsistency in the terms of the
Agreement with respect to the effect of the Stock Split;

WHEREAS, Section 27 of the Agreement provides that Intel may amend the
Agreement without the approval of any holders of Rights Certificates (as
defined in the Agreement) to cure any ambiguity and to correct any
inconsistency between provisions of the Agreement and to change the Purchase
Price; and

WHEREAS, Intel and Harris desire to amend the Agreement by: (i) deleting
Section 11 (n) of the Agreement; (ii) clarifying that each outstanding and each
future share of Intel Common Stock has, and should have, associated with it,
subject to the terms of the Agreement, one (1) Right (as defined in the
Agreement) to purchase one (1) share of Intel Common Stock when entitled to do
so under the terms of the Agreement; and (iii) to set the Purchase Price at
$260.00

NOW, THEREFORE, Intel and Harris, as successor to FNB, hereby agree as follows:

1. Effective as of immediately prior to the effective date of the Stock
Split, Section 11 (n) of the Agreement is hereby deleted and shall be of
no further force and effect.

2. Effective as of the effective date of the Stock Split, each outstanding,
and each future, share of Intel Common Stock shall have associated with it

ST0003/3-18-94 1.
<PAGE> 4
one (1) Right to purchase one (1) share of Common Stock when entitled to
do so under the terms of the Agreement.

3. Effective as of the date hereof, the Purchase Price, as defined in Section
7(b) of the Agreement, shall be $260.00.

4. Except as otherwise expressly provided in this Agreement, all other terms
of the Agreement shall remain unchanged and shall continue in full force
and effect.

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed and delivered as of the date first above written.

<TABLE>
<S> <C>
INTEL CORPORATION HARRIS TRUST AND SAVINGS BANK

/s/ Thomas R. Lavelle /s/ Richard C. Carlson
- ----------------------------- ----------------------
Signature Signature

Thomas R. Lavelle Richard C. Carlson
- ----------------- ------------------
Printed Name Printed Name

Assistant Secretary Vice President
- ---------------------- --------------
Title Title
</TABLE>

ST0003/3-18-94 2.

<PAGE> 1
EXHIBIT 4.4

FIRST AMENDMENT TO WARRANT AGREEMENT
BETWEEN
INTEL CORPORATION AND THE FIRST NATIONAL BANK OF BOSTON,
WARRANT AGENT - 1998 STEP-UP WARRANTS
TO PURCHASE COMMON STOCK -
DATED MARCH 1, 1993

This First Amendment to the above referenced Warrant Agreement (the
"Agreement") is dated as of October 18, 1993, between Intel Corporation, a
Delaware corporation (the "Company"), and The First National Bank of Boston, a
national banking association, as warrant agent (the "Warrant Agent").

WHEREAS the Company issued 1998 Step-Up Warrants (the "Warrants") entitling
holders to purchase an initial aggregate of up to ten million (10,000,000)
shares ("Shares") of the Company's common stock, $0.001 par value (the "Common
Stock"); and

WHEREAS, pursuant to Sections 14(a), (h) and (k) of the Agreement, the Warrants
have been adjusted to reflect a 2:1 split of the Company's Common Stock;

NOW, THEREFORE, the Agreement is amended as set forth below.

1. Section 2 is amended to read as follows:

SECTION 2. Amount Issued. Subject to the provisions of this Agreement,
Warrants to purchase no more than twenty million (20,000,000) Shares may be
issued and delivered by the Company hereunder.

2. The second paragraph of Section 7 is amended to read as follows:

Subject to the provisions of this Agreement, including Section 14, each
Warrant shall entitle the holder thereof to purchase from the Company (and the
Company shall issue and sell to such holder of a Warrant) one fully paid and
non-assessable Share at the price set forth in the following table (such
price, as may be adjusted from time to time as provided in Section 14, being
the "Exercise Price"):

LJ0138/10-22-93 1.
<PAGE> 2
<TABLE>
<CAPTION>
EXERCISE PRICE
EXERCISE DATE PER SHARE

After On or Before
----- ------------
<S> <C> <C>
May 13, 1993 March 14, 1994 $71.50
March 14, 1994 March 14, 1995 $74.50
March 14, 1995 March 14, 1996 $77.50
March 14, 1996 March 14, 1997 $80.50
March 14, 1997 March 14, 1998 $83.50
</TABLE>

3. Exhibit A is replaced with the attached Exhibit A-1.

In all other respects the Agreement remains in full force and effect.

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed and delivered as of the day and year first above written.

<TABLE>
<S> <C>
Attest: INTEL CORPORATION

/s/ Suzanne Taaffe By: /s/ Thomas R. Lavelle
- ----------------------- ------------------------

Attest: THE FIRST NATIONAL BANK OF BOSTON

/s/ Colleen M. Duran By: /s/ Kenyon Bissell
- ------------------------ -----------------------
</TABLE>

LJ0138/10-22-93 2.
<PAGE> 3

EXHIBIT A-1 (REV'D 10/93)

[FORM OF FACE OF WARRANT CERTIFICATE]

VOID AFTER MARCH 14, 1998

<TABLE>
<S> <C>
No. C- WARRANT TO PURCHASE ________
SHARES OF COMMON STOCK
</TABLE>

INTEL CORPORATION

1998 STEP-UP WARRANT TO PURCHASE COMMON STOCK

This Warrant Certificate certifies that ____________________________________
or registered assigns, is the registered holder of a 1998 Step- Up Warrant (the
"Warrant") of Intel Corporation, a Delaware corporation (the "Company"), to
purchase the number of shares (the "Shares") of Common Stock, $0.001 par value
(the "Common Stock"), of the Company set forth above. This Warrant expires at
5:00 p.m. New York City time (the "Close of Business") on March 14, 1998 (the
"Expiration Date"), unless such date is extended at the option of the Company,
and entitles the holder to purchase from the Company the number of fully paid
and nonassessable Shares set forth above at the initial exercise price (the
"Exercise Price"), payable in lawful money of the United States of America,
determined in accordance with the following table:

<TABLE>
<CAPTION>
Exercise Date
-------------

After the Close On or Before the
--------------- ----------------
of Business Close of Business Exercise Price Per Share
----------- ----------------- ------------------------
<S> <C> <C>
May 13, 1993 March 14, 1994 $71.50
March 14, 1994 March 14, 1995 $74.50
March 14, 1995 March 14, 1996 $77.50
March 14, 1996 March 14, 1997 $80.50
March 14, 1997 March 14, 1998 $83.50
</TABLE>

Subject to the terms and conditions set forth herein and in the Warrant
Agreement referred to on the reverse hereof, this Warrant may be exercised upon
surrender of this Warrant Certificate and payment of the aggregate Exercise
Price at the office or agency of the Warrant Agent in New York, New York or in
Boston, Massachusetts (each such office, a "Warrant Agent Office").

The Exercise Price and the number of Shares purchasable upon exercise of this
Warrant are subject to adjustment upon the occurrence of certain events as set
forth in the Warrant Agreement.

17 WARRANT AGREEMENT
<PAGE> 4
No Warrant may be exercised prior to May 14, 1993 or after the Close of
Business on the Expiration Date, unless the Company exercises its option to
extend such date. After the Close of Business on the Expiration Date, the
Warrants will become wholly void and of no value.

REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS WARRANT
CERTIFICATE SET FORTH ON THE REVERSE HEREOF. SUCH FURTHER PROVISIONS SHALL FOR
ALL PURPOSES HAVE THE SAME EFFECT AS THOUGH FULLY SET FORTH AT THIS PLACE.

This Warrant Certificate shall not be valid unless countersigned by the
Warrant Agent.

IN WITNESS WHEREOF, the Company has caused this Certificate to be executed by
its duly authorized officers, and the corporate seal hereunto affixed.

Dated: ________________.

INTEL CORPORATION

By ______________________________

[Corporate Seal of Intel Corporation]

ATTEST:

By ____________________________________

Countersigned:
THE FIRST NATIONAL BANK OF BOSTON,
AS WARRANT AGENT

By ___________________________________

18 WARRANT AGREEMENT
<PAGE> 5
[FORM OF REVERSE OF WARRANT CERTIFICATE]

INTEL CORPORATION

The warrant evidenced by this warrant certificate is a part of a duly
authorized issue of 1998 Step-Up Warrants to purchase a maximum of ten million
(10,000,000) Shares of Common Stock (subject to adjustment) issued pursuant to
a Warrant Agreement, dated as of March 1, 1993 as the same may be amended from
time to time (the "Warrant Agreement"), duly executed and delivered by the
Company to The First National Bank of Boston, as Warrant Agent (the "Warrant
Agent"). The Warrant Agreement hereby is incorporated by reference in and made
a part of this instrument and is hereby referred to for a description of the
rights, limitation of rights, obligations, duties and immunities thereunder of
the Warrant Agent, the Company and the holders (the words "holders" or "holder"
meaning the registered holders or registered holder) of the Warrants. A copy
of the Warrant Agreement may be inspected at the Warrant Agent Office and is
available upon written request addressed to the Company. All terms used herein
that are defined in the Warrant Agreement have the meanings assigned to them
therein.

Warrants may be exercised to purchase Shares from the Company before the
Close of Business on the Expiration Date, at the Exercise Price set forth on
the face hereof, subject to adjustment as described in the Warrant Agreement.
The holder of the Warrant evidenced by this Warrant Certificate may exercise
such Warrant by surrendering the Warrant Certificate, with the form of election
to purchase set forth hereon properly completed and executed, together with
payment of the aggregate Exercise Price, in lawful money of the United States
of America, and any applicable transfer taxes, at the Warrant Agent Office.

In the event that upon any exercise of the Warrant evidenced hereby the
number of Shares actually purchased shall be less than the total number of
Shares purchasable upon exercise of the Warrant evidenced hereby, there shall
be issued to the holder hereof, or such holder's assignee, a new Warrant
Certificate evidencing a Warrant to purchase the Shares not so purchased. No
adjustment shall be made for any cash dividends on any Shares issuable upon
exercise of this Warrant. After the Close of Business on the Expiration Date,
unexercised Warrants shall become wholly void and of no value.

The Company shall not be required to issue fractions of Shares or any
certificates that evidence fractional Shares. In lieu of such fractional
Shares, there shall be paid to holders of the Warrant Certificates with regard
to which such fractional Shares would otherwise be issuable an amount in cash
equal to the same fraction of the current market value (as determined pursuant
to the Warrant Agreement) of a full Share.

Warrant Certificates, when surrendered at the Warrant Agent Office by the
registered holder thereof in person or by a legal representative or attorney
duly authorized in writing, may be exchanged, in the manner and subject to the
limitations provided in the Warrant Agreement, but without payment of any
service charge, for another Warrant Certificate or Warrant Certificates of like
tenor evidencing a Warrant to purchase in the aggregate a like number of
Shares.

19 WARRANT AGREEMENT
<PAGE> 6
Upon due presentment for registration of transfer of this Warrant Certificate
at the Warrant Agent Office, a new Warrant Certificate or Warrant Certificates
of like tenor and evidencing a Warrant or Warrants to purchase in the aggregate
a like number of Shares shall be issued to the transferee in exchange for this
Warrant Certificate, subject to the limitations provided in the Warrant
Agreement, without charge, except for any tax or other governmental charge
imposed in connection therewith.

The Company and Warrant Agent may deem and treat the registered holder hereof
as the absolute owner of this Warrant Certificate (notwithstanding any notation
of ownership or other writing hereon made by anyone) for the purpose of any
exercise hereof and for all other purposes, and neither the Company nor the
Warrant Agent shall be affected by any notice to the contrary.

20 WARRANT AGREEMENT
<PAGE> 7
ELECTION TO EXERCISE

(TO BE EXECUTED UPON EXERCISE OF THE WARRANT)

The undersigned hereby irrevocably elects to exercise the right, represented
by this Warrant Certificate, to purchase _______ Shares and herewith tenders in
payment for such Shares $______ in lawful money of the United States of
America, in accordance with the terms hereof. The undersigned requests that a
certificate representing such Shares be registered and delivered as follows:

________________________________________________________________________
Name

________________________________________________________________________
Address

________________________________________________________________________
Delivery Address (if different)

If such number of Shares is less than the aggregate number of Shares
purchasable hereunder, the undersigned requests that a new Warrant Certificate
representing the balance of such Shares be registered and delivered as follows:

________________________________________________________________________
Name

________________________________________________________________________
Address

________________________________________________________________________
Delivery Address (if different)

- ------------------------------------ ------------------------------------------------------------------------
Social Security or Other Taxpayer Signature
Identification Number of Holder
Note: The above signature must correspond with the name as written upon
the face of this Warrant Certificate in every particular, without alteration
or enlargement or any change whatsoever. If the certificate representing the
Shares or any Warrant Certificate representing Warrants not exercised is
to be registered in a name other than that in which this Warrant Certificate
is registered, the signature of the holder hereof must be guaranteed.

SIGNATURE GUARANTEED:
</TABLE>

____________________________________

21 WARRANT AGREEMENT
<PAGE> 8
ASSIGNMENT

(TO BE EXECUTED BY THE REGISTERED HOLDER IF SUCH
HOLDER DESIRES TO TRANSFER THE WARRANT CERTIFICATE)

FOR VALUE RECEIVED, the undersigned registered holder hereby sells, assigns
and transfers unto

________________________________________________________________________
Name of Assignee

________________________________________________________________________
Address of Assignee

this Warrant Certificate, together with all right, title and interest therein,
and does irrevocably constitute and appoint ____________________ attorney, to
transfer the within Warrant Certificate on the books of the Warrant Agent, with
full power of substitution.

- ------------------------------------ ----------------------------------------------------------------------
Dated Signature

Note: The above signature must correspond with the name as written
upon the face of this Warrant Certificate in every particular,
without alteration or enlargement or any change whatsoever.

- -------------------------------------
Social Security or Other Taxpayer
Identification Number of Assignee

SIGNATURE GUARANTEED:
</TABLE>

____________________________________

22 WARRANT AGREEMENT
<PAGE> 9

SECOND AMENDMENT TO WARRANT AGREEMENT

This Second Amendment to "Warrant Agreement between Intel Corporation and The
First National Bank of Boston, Warrant Agent - 1998 Step-Up Warrants to
Purchase Common Stock dated March 1, 1993," as amended by First Amendment dated
October 18, 1993 (the Warrant Agreement as amended by the First Amendment
collectively referred to as the "Agreement"), is dated as of January 17, 1994
(the "Effective Date"), among Intel Corporation, a Delaware corporation
("Intel"), The First National Bank of Boston, a national banking association
("Bank of Boston"), and Harris Trust and Savings Bank, an Illinois banking
corporation ("Harris").

Intel, Bank of Boston, and Harris agree as follows:

1. Bank of Boston shall have no further rights and obligations as Warrant
Agent under the Agreement as of the Effective Date, provided, however, that
Bank of Boston shall continue to have the obligations of a former Warrant Agent
set forth in Section 19 of the Agreement, including, without limitation, the
obligation to provide reasonable assistance for the orderly transfer of the
duties as Warrant Agent under the Agreement to Harris and diligently to tender
to Harris all documents, records, and information regarding the Warrants and
the Agreement.

2. Harris shall assume all of the rights and obligations as Warrant Agent
under the Agreement as of the Effective Date.

3. The first sentence of Section 6 is amended by adding after the word
"exchange" the following: "participating in the Medallion Signature Guaranty
Program."

4. The third sentence of Section 6 is amended by deleting "Boston,
Massachusetts" and inserting in its place "Chicago, Illinois."

5. Section 7 is amended by deleting the following sentence: "The holder of a
Warrant shall exercise such holder's right to purchase Shares by depositing
with the Warrant Agent at a Warrant Agent Office the Warrant Certificate
evidencing such Warrant, with the form of election to purchase on the reverse
thereof duly completed and signed by the registered holder or holders thereof
or by the duly appointed legal representative thereof or by a duly authorized
attorney, such signature to be guaranteed by a bank or trust company, by a
broker or dealer

LJ0138/10-22-93
<PAGE> 10

which is a member of the NASD or by a member of a national securities exchange,
and upon payment of the Exercise Price for the number of Shares in respect of
which such Warrants are being exercised in lawful money of the United States of
America." and inserting in its place: "The holder of a Warrant shall exercise
such holder's right to purchase Shares by depositing with the Warrant Agent at
a Warrant Agent Office the Warrant Certificate evidencing such Warrant, with
the form of election to purchase on the reverse thereof duly completed and
signed by the registered holder or holders thereof or by the duly appointed
legal representative thereof or by a duly authorized attorney, such signature
to be guaranteed by a bank or trust company, by a broker or dealer which is a
member of the NASD or by a member of a national securities exchange
participating in the Medallion Signature Guaranty Program, and upon payment of
the Exercise Price for the number of Shares in respect of which such Warrants
are being exercised in lawful money of the United States of America."

6. Section 22 is amended by deleting:

"The First National Bank of Boston
P.O. Box 1865
Boston, MA 02105
Attention: Shareholder Services Division

"The Warrant Agent maintains a Warrant Agent Office at BancBoston Clearance
Corporation, 55 Broadway, Third Floor, New York, New York and at The First
National Bank of Boston, 100 Federal Street, Boston, Massachusetts."

and inserting in its place:

"Harris Trust and Savings Bank
P.O. Box 755
Chicago, Illinois 60690
Attention: Shareholder Services Division

"The Warrant Agent maintains a Warrant Agent Office at Harris Trust Company of
New York, 77 Water Street, 4th Floor, New York, New York and at Harris Trust
and Savings Bank, 311 West Monroe Street, Chicago, Illinois."

7. Exhibit A-1 is replaced with the attached Exhibit A-2.

LJ0138/10-22-93
<PAGE> 11

Except as otherwise expressly provided in this Amendment, all other terms of
the Agreement shall remain unchanged and shall continue in full force and
effect.

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed and delivered as of the day and year first above written.

<TABLE>
<S> <C>
Attest: INTEL CORPORATION

/s/ Suzanne Taaffe By: /s/ Thomas R. Lavelle

Attest: THE FIRST NATIONAL BANK OF BOSTON

/s/ Colleen Duran By: /s/ Kenyon Bissell

Attest: HARRIS TRUST AND SAVINGS BANK

/s/ Kathleen J. Zednick By: /s/ Richard C. Carlson
</TABLE>

LJ0138/10-22-93
<PAGE> 12

EXHIBIT A-2 (REV'D 1/94)

[FORM OF FACE OF WARRANT CERTIFICATE]

VOID AFTER MARCH 14, 1998

<TABLE>
<S> <C>
No. C- Warrant to Purchase _______________
Shares of Common Stock
</TABLE>

INTEL CORPORATION

1998 STEP-UP WARRANT TO PURCHASE COMMON STOCK

This Warrant Certificate certifies that or registered
assigns, is the registered holder of a 1998 Step-Up Warrant (the "Warrant") of
Intel Corporation, a Delaware corporation (the "Company"), to purchase the
number of shares (the "Shares") of Common Stock, $0.001 par value (the "Common
Stock"), of the Company set forth above. This Warrant expires at 5:00 p.m. New
York City time (the "Close of Business") on March 14, 1998 (the "Expiration
Date"), unless such date is extended at the option of the Company, and entitles
the holder to purchase from the Company the number of fully paid and
nonassessable Shares set forth above at the initial exercise price (the
"Exercise Price"), payable in lawful money of the United States of America,
determined in accordance with the following table:

<TABLE>
<CAPTION>
EXERCISE DATE
- ------------------------------------
ON OR BEFORE THE
AFTER THE CLOSE CLOSE OF EXERCISE PRICE PER
OF BUSINESS BUSINESS SHARE
- ---------------- ---------------- ---------------------
<S> <C> <C>
May 13, 1993 March 14, 1994 $71.50
March 14, 1994 March 14, 1995 $74.50
March 14, 1995 March 14, 1996 $77.50
March 14, 1996 March 14, 1997 $80.50
March 14, 1997 March 14, 1998 $83.50
</TABLE>

Subject to the terms and conditions set forth herein and in the Warrant
Agreement referred to on the reverse hereof, this Warrant may be exercised upon
surrender of this Warrant Certificate and payment of the aggregate Exercise
Price at the office or agency of the Warrant Agent in New York, New York or in
Chicago, Illinois (each such office, a "Warrant Agent Office").

The Exercise Price and the number of Shares purchasable upon exercise of
this Warrant are subject to adjustment upon the occurrence of certain events as
set forth in the Warrant Agreement.

No Warrant may be exercised prior to May 14, 1993 or after the Close of
Business on the Expiration Date, unless the Company exercises its option to
extend such date. After the Close of Business on the Expiration Date, the
Warrants will become wholly void and of no value.
<PAGE> 13

Reference is hereby made to the further provisions of this Warrant
Certificate set forth on the reverse hereof. Such further provisions shall for
all purposes have the same effect as though fully set forth at this place.

This Warrant Certificate shall not be valid unless countersigned by the
Warrant Agent.

In Witness Whereof, the Company has caused this Certificate to be executed
by its duly authorized officers, and the corporate seal hereunto affixed.

Dated:
- ------------------------
Intel Corporation

By
[Corporate Seal of Intel
Corporation]

Attest:

Countersigned:
HARRIS TRUST AND SAVINGS
BANK,
as Warrant Agent

By
<PAGE> 14

[FORM OF REVERSE OF WARRANT CERTIFICATE]

INTEL CORPORATION

The warrant evidenced by this warrant certificate is a part of a duly
authorized issue of 1998 Step-Up Warrants to purchase a maximum of ten million
(10,000,000) Shares of Common Stock (subject to adjustment) issued pursuant to a
Warrant Agreement, dated as of March 1, 1993 as the same may be amended from
time to time (the "Warrant Agreement"), duly executed and delivered by the
Company to Harris Trust and Savings Bank, as Warrant Agent (the "Warrant
Agent"). The Warrant Agreement hereby is incorporated by reference in and made a
part of this instrument and is hereby referred to for a description of the
rights, limitation of rights, obligations, duties and immunities thereunder of
the Warrant Agent, the Company and the holders (the words "holders" or "holder"
meaning the registered holders or registered holder) of the Warrants. A copy of
the Warrant Agreement may be inspected at the Warrant Agent Office and is
available upon written request addressed to the Company. All terms used herein
that are defined in the Warrant Agreement have the meanings assigned to them
therein.

Warrants may be exercised to purchase Shares from the Company before the
Close of Business on the Expiration Date, at the Exercise Price set forth on the
face hereof, subject to adjustment as described in the Warrant Agreement. The
holder of the Warrant evidenced by this Warrant Certificate may exercise such
Warrant by surrendering the Warrant Certificate, with the form of election to
purchase set forth hereon properly completed and executed, together with payment
of the aggregate Exercise Price, in lawful money of the United States of
America, and any applicable transfer taxes, at the Warrant Agent Office.

In the event that upon any exercise of the Warrant evidenced hereby the
number of Shares actually purchased shall be less than the total number of
Shares purchasable upon exercise of the Warrant evidenced hereby, there shall be
issued to the holder hereof, or such holder's assignee, a new Warrant
Certificate evidencing a Warrant to purchase the Shares not so purchased. No
adjustment shall be made for any cash dividends on any Shares issuable upon
exercise of this Warrant. After the Close of Business on the Expiration Date,
unexercised Warrants shall become wholly void and of no value.

The Company shall not be required to issue fractions of Shares or any
certificates that evidence fractional Shares. In lieu of such fractional Shares,
there shall be paid to holders of the Warrant Certificates with regard to which
such fractional Shares would otherwise be issuable an amount in cash equal to
the same fraction of the current market value (as determined pursuant to the
Warrant Agreement) of a full Share.

Upon due presentment for registration of transfer of this Warrant
Certificate at the Warrant Agent Office, a new Warrant Certificate or Warrant
Certificates of like tenor and evidencing a Warrant or Warrants to purchase in
the aggregate a like number of Shares shall be issued to the transferee in
exchange for this Warrant Certificate, subject to the limitations provided in
the Warrant Agreement, without charge, except for any tax or other governmental
charge imposed in connection therewith.

The Company and Warrant Agent may deem and treat the registered holder
hereof as the absolute owner of this Warrant Certificate (notwithstanding any
notation of ownership or other writing hereon made by anyone) for the purpose of
any exercise hereof and for all other purposes, and neither the Company nor the
Warrant Agent shall be affected by any notice to the contrary.
<PAGE> 16

ELECTION TO EXERCISE
(TO BE EXECUTED UPON EXERCISE OF THE WARRANT)

The undersigned hereby irrevocably elects to exercise the right,
represented by this Warrant Certificate, to purchase Shares and
herewith tenders in payment for such Shares $ in lawful money of the
United States of America, in accordance with the terms hereof. The undersigned
requests that a certificate representing such Shares be registered and delivered
as follows:

- --------------------------------------------------------------------------------
Name

- --------------------------------------------------------------------------------
Address

- --------------------------------------------------------------------------------
Delivery Address (if different)

If such number of Shares is less than the aggregate number of Shares purchasable
hereunder, the undersigned requests that a new Warrant Certificate representing
the balance of such Shares be registered and delivered as follows:

- --------------------------------------------------------------------------------
Name

- --------------------------------------------------------------------------------
Address

- --------------------------------------------------------------------------------
Delivery Address (if different)

<TABLE>
<S> <C>
- ------------------------------------- -----------------------------------------------------
Social Security or Other Taxpayer Signature
Identification Number of Holder
Note: The above signature must correspond with the
name as written upon the face of this Warrant
Certificate in every particular, without alteration
or enlargement or any change whatsoever. If the
certificate representing the Shares or any Warrant
Certificate representing Warrants not exercised is to
be registered in a name other than that in which this
Warrant Certificate is registered, the signature of
the holder hereof must be guaranteed.
Signature Guaranteed:

- -------------------------------------
</TABLE>
<PAGE> 17

ASSIGNMENT

(TO BE EXECUTED BY THE REGISTERED HOLDER IF SUCH
HOLDER DESIRES TO TRANSFER THE WARRANT CERTIFICATE)

For Value Received, the undersigned registered holder hereby sells, assigns
and transfers unto

- --------------------------------------------------------------------------------
Name of Assignee

- --------------------------------------------------------------------------------
Address of Assignee

this Warrant Certificate, together with all right, title and interest therein,
and does irrevocably constitute and appoint attorney, to transfer
the within Warrant Certificate on the books of the Warrant Agent, with full
power of substitution.

<TABLE>
<S> <C>
- ----------------------------------- ------------------------------------------
Dated Signature
Note: The above signature must correspond
with the name as written upon the face of
this Warrant Certificate in every particular,
without alteration or enlargement or any
change whatsoever.
- -----------------------------------
Social Security or Other Taxpayer
Identification Number of Assignee

SIGNATURE Guaranteed:

- -----------------------------------
</TABLE>

<PAGE> 1

EXHIBIT 10.8

INTEL CORPORATION
EXECUTIVE OFFICER BONUS PLAN
(As adopted and effective January 1, 1994)

1. PURPOSE

The purpose of this Plan is to motivate and reward eligible employees for good
performance by making a proportion of their cash compensation dependent on
growth in earnings per share ("EPS") of Intel Corporation (the "Company").
The Plan is designed to ensure that the annual bonus paid hereunder to
executive officers of the Company is deductible under Section 162(m) of the
Internal Revenue Code of 1986, as amended, and the regulations and
interpretations promulgated thereunder (the "Code").

2. COVERED INDIVIDUALS

The individuals entitled to bonus payments hereunder shall be the executive
officers of the Company, as determined by the Committee.

3. THE COMMITTEE

The Committee shall consist of at least two outside directors of the Company
that satisfy the requirements of Code Section 162(m). The Committee shall
have the sole discretion and authority to administer and interpret the Plan in
accordance with Code Section 162(m).

4. AMOUNT OF BONUS

Annual bonus payments are made in cash. The bonus payment is the product of
(i) an individual target set each year by the Committee in writing before the
performance year begins and (ii) EPS for the performance year (increased or
decreased, in each case in accordance with factors adopted by the Committee
before the performance year begins that relate to unusual items, but in any
event the "EPS" for this calculation shall not exceed operating income for the
performance year per weighted average common and common equivalent shares
outstanding for the year) multiplied by the ratio of the adjusted actual EPS
to an EPS target for the year that is set by the Committee in writing in
advance of the beginning of each year. However, no bonus in excess of
$5,000,000 will be paid to any executive officer. The Committee may also
reduce an individual's maximum bonus calculated under the preceding formula in
its sole discretion. The bonus payable hereunder shall be paid in lieu of any
bonus payable under the Company's Executive Bonus Plan.

5. PAYMENT OF BONUS

The payment of a given year's bonus requires that the executive officer be on
the Company's payroll as of December 31st of the bonus year. The Committee
may make exceptions to this requirement in the case of retirement, death or
disability, as determined by the Committee in its sole discretion. No bonus
shall be paid unless and until the Committee certifies in writing that the
performance goals of this Plan are satisfied.

6. AMENDMENT AND TERMINATION

The Company reserves the right to amend or terminate this Plan at any time
with respect to future services of covered individuals. Plan amendments will
require stockholder approval only to the extent required by applicable law.

<PAGE> 1

EXHIBIT 11.1

INTEL CORPORATION

COMPUTATION OF EARNINGS PER SHARE
(In Millions, Except Per Share Amounts)
<TABLE>
<CAPTION>
Year Ended
------------------------------------------
Dec. 28, Dec.26 Dec. 25
1991 1992 1993
---- ---- ----
<S> <C> <C> <C>
PRIMARY SHARES CALCULATION

Reconciliation of weighted average number
of shares outstanding to amount used in
primary earnings per share computation:

Weighted average number of shares outstanding 405 414 418

Add-shares issuable from assumed exercise of options
and warrants 13 15 23
---- -- --

Weighted average number of shares outstanding as
adjusted 418 429 441
=== === ===

FULLY DILUTED SHARES CALCULATION

Reconciliation of weighted average number
of shares outstanding to amount used in
fully diluted earnings per share computation:

Weighted average number of shares outstanding 405 414 418

Add-shares issuable from assumed exercise of options
and warrants 14 17 23
-- -- --

Weighted average number of shares outstanding as
adjusted 419 431 441
====== ====== ======

NET INCOME $ 819 $1,067 $2,295
======== ====== ======

PRIMARY EARNINGS PER SHARE $ 1.96 $ 2.49 $ 5.20
======== ====== ======

FULLY DILUTED EARNINGS PER SHARE(1) $ 1.95 $ 2.48 $ 5.20
======== ====== ======
</TABLE>

(1) Earnings per common and common equivalent share presented on the face
of the income statement represent primary earnings per share. Dual
presentation of primary and fully diluted earnings per share has not been made
on the face of the income statement because the differences are insignificant.
This exhibit is presented because common stock equivalents represent more than
3% of weighted average common shares outstanding.

<PAGE> 1

EXHIBIT 12.1

INTEL CORPORATION

STATEMENT SETTING FORTH THE COMPUTATION
OF RATIOS OF EARNINGS TO FIXED CHARGES FOR INTEL CORPORATION

(In Millions of Dollars)

<TABLE>
<CAPTION>
Years Ended
---------------------------------------------------------------------------------

Dec. 30, Dec. 29, Dec. 28, Dec. 26, Dec. 25,
1989 1990 1991 1992 1993
-------- -------- -------- ------ --------
<S> <C> <C> <C> <C> <C>
Income before taxes $583 $986 $1,195 $1,569 $3,530

Add - Fixed charges net of
capitalized interest 112 117 98 68 58
----- ----- ---- ------- -------

Income before taxes and fixed
charges (net of capitalized interest) $695 $1,103 $1,293 $1,637 $3,588
==== ====== ====== ====== ======

Fixed charges:

Interest* $ 96 $ 99 $ 82 $ 54 $ 50

Capitalized interest 6 3 6 11 8

Estimated interest component
of rental expense 16 18 16 14 8
---- ------ ------ ----- ------

Total $118 $ 120 $ 104 $ 79 $ 66
==== ====== ====== ===== ====

Ratio of earnings before taxes
and fixed charges, to fixed
charges 5.9x 9.2x 12.4x 20.7x 54.4x
</TABLE>

* Interest expense includes the amortization of underwriting fees for the
relevant periods outstanding.

<PAGE> 1
EXHIBIT 13

CONSOLIDATED STATEMENTS
OF INCOME

<TABLE>
<CAPTION>
THREE YEARS ENDED DECEMBER 25, 1993

(In millions-except per share amounts) 1993 1992 1991
- --------------------------------------- ------ ------- ------
<S> <C> <C> <C>
NET REVENUES $8,782 $5,844 $4,779
- --------------- ---------- --------- -------
Cost of sales 3,252 2,557 2,316
Research and development 970 780 618
Marketing, general and administrative 1,168 1,017 765
------ ------ -----
Operating costs and expenses 5,390 4,354 3,699
------ ------ ------
OPERATING INCOME 3,392 1,490 1,080
Interest expense (50) (54) (82)
Interest income and other, net 188 133 197
-------- -------- ---------
Income before taxes 3,530 1,569 1,195
Provision for taxes 1,235 502 376
------- ------- -------
NET INCOME $2,295 $1,067 $ 819
======== ======== ========

EARNINGS PER COMMON AND COMMON EQUIVALENT SHARE $ 5.20 $ 2.49 $ 1.96
WEIGHTED AVERAGE COMMON AND COMMON EQUIVALENT ========= ======== ========
SHARES OUTSTANDING 441 429 418
========= ======= ========
</TABLE>
See accompanying notes.

<PAGE> 2
CONSOLIDATED
BALANCE SHEETS

<TABLE>
<CAPTION>
December 25, 1993 and December 26, 1992

(In millions-except per share amounts) 1993 1992
- -------------------------------------- ----- ------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $1,659 $1,843
Short-term investments 1,477 993
Accounts receivable,
net of allowance for doubtful accounts of $22
($26 in 1992) 1,448 1,069
Inventories 838 535
Deferred tax assets 310 205
Other current assets 70 46
------- -------
TOTAL CURRENT ASSETS 5,802 4,691
------- -------
Property, plant and equipment:
Land and buildings 1,848 1,463
Machinery and equipment 4,148 2,874
Construction in progress 317 311
------- -------
6,313 4,648
Less accumulated depreciation 2,317 1,832
------- -------
PROPERTY, PLANT AND EQUIPMENT, NET 3,996 2,816
------- -------

LONG-TERM INVESTMENTS 1,416 496
OTHER ASSETS 130 86
------- -------

TOTAL ASSETS $11,344 $8,089
========= ========

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
Short-term debt $ 399 $ 202
Long-term debt redeemable within one year 98 110
Accounts payable 427 281
Deferred income on shipments to distributors 200 149
Accrued compensation and benefits 544 435
Other accrued liabilities 374 306
Income taxes payable 391 359
-------- -------

TOTAL CURRENT LIABILITIES 2,433 1,842
-------- -------

LONG-TERM DEBT 426 249

DEFERRED TAX LIABILITIES 297 180

PUT WARRANTS 688 373

COMMITMENTS AND CONTINGENCIES

Stockholders equity:

Preferred stock, $.001 par value,
50 shares authorized; none issued - -

Common stock, $.001 par value,
1,400 shares authorized; 418 issued
and outstanding in 1993 (419 in 1992)
and Capital in excess of par value 2,194 1,776
Retained earnings 5,306 3,669
-------- -------

TOTAL STOCKHOLDERS' EQUITY 7,500 5,445
------- -------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $11,344 $8,089
======== =========
</TABLE>

See accompanying notes.
<PAGE> 3

CONSOLIDATED STATEMENTS
OF CASH FLOWS
<TABLE>
<CAPTION>
Three Years Ended December 25, 1993

(In millions) 1993 1992 1991
- -------------- ------- -------
<S> <C> <C> <C>
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR $1,843 $1,519 $1,620
------- ------- -------
Cash flows provided by (used for)
operating activities:

Net income 2,295 1,067 819

Adjustments to reconcile net income to
net cash provided by operating activities:

Depreciation 717 518 418
Net loss on retirements
of property, plant and equipment 36 57 25

Amortization of debt discount 17 16 16
Change in deferred tax assets and liabilities 12 13 (19)

Changes in assets and liabilities:

(Increase) decrease in accounts receivable (379) (371) 11
(Increase) in inventories (303) (113) (7)
(Increase) decrease in other assets (68) (61) 31
Increase (decrease) in acounts payable 146 112 (41)
Tax benefit from employee stock plans 68 55 35
Increase (decrease) in income taxes payable 32 207 (89)
Increase in other liabilities 228 136 149
--------- -------- ---------

Total adjustments 506 569 529
------ ------ ------

NET CASH PROVIDED BY OPERATING ACTIVITIES 2,801 1,636 1,348
------ ------ ------
Cash flows provided by
(used for) investing activities:

Additions to property, plant and equipment (1,933) (1,228) (948)

(Increase) decrease in short-term
investments, net (244) 28 (420)

Additions to long-term investments (1,165) (293) (127)

Sales and maturities of long-term investments 5 13 37
------- -------- -------
NET CASH (USED FOR) INVESTING ACTIVITIES (3,337) (1,480) (1,458)
------- ------- -------

Cash flows provided by (used for)
financing activities:

Increase (decrease) in short-term debt, net 197 29 (30)
Additions to long-term debt 148 -- 2
Retirement of long-term debt -- (20) (75)
Proceeds from sales of shares
through employee stock plans and other 133 138 98
Proceeds from sale of Step-Up Warrants, net 287 -- --
Proceeds from sales of put
warrants, net of repurchases 62 42 14
Repurchase and retirement of common stock (391) -- --
Payment of dividends to stockholders (84) (21) --
------- --------- ---------

NET CASH PROVIDED BY FINANCING ACTIVITIES 352 168 9
--------- ---------- --------
NET (DECREASE) INCREASE IN
CASH AND CASH EQUIVALENTS (184) 324 (101)
------- ------ -------

CASH AND CASH EQUIVALENTS, END OF YEAR $1,659 $1,843 $1,519
========= ======== =========
Supplemental disclosures of cash flow information:
Cash paid during the year for:
Interest $ 39 $ 32 $ 59
Income taxes $1,123 $ 227 $ 448
</TABLE>
See accompanying notes.
<PAGE> 4
CONSOLIDATED STATEMENTS
OF STOCKHOLDERS' EQUITY

<TABLE>
<CAPTION>
THREE YEARS ENDED DECEMBER 25, 1993
COMMON STOCK AND CAPITAL
IN EXCESS OF PAR VALUE
-------------------------
Number Retained
(In millions) of shares Amount Earnings Total
- ------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
BALANCE AT DECEMBER 29, 1990 399 $1,573 $2,019 $3,592

Proceeds from sales of shares
through employee stock plans,
tax benefit of $35 and other 9 133 -- 133

Proceeds from sales of put warrants -- 14 14
Reclassification of put warrant obligation -- (79) (61) (140)
Net income -- -- 819 819
----- ------- ------- -------

BALANCE AT DECEMBER 28, 1991 408 1,641 2,777 4,418

Proceeds from sales of shares
through employee stock plans,
tax benefit of $55 and other 11 193 -- 193
Proceeds from sales of put warrants,
net of repurchases -- 42 -- 42

Reclassifications of put warrant obligation, net -- (100) (133) (233)
Cash dividends declared ($.10 per share) -- -- (42) (42)
Net income -- -- 1,067 1,067
------ ------- ------ --------

BALANCE AT DECEMBER 26, 1992 419 1,776 3,669 5,445

Proceeds from sales of shares through employee
stock plans, tax benefit of $68 and other 6 201 -- 201

Proceeds from sales of put warrants -- 62 -- 62
Reclassifications of put warrant obligation, net -- (37) (278) (315)
Proceeds from sale of Step-Up Warrants, net -- 287 -- 287
Repurchase and retirement of common stock (7) (95) (296) (391)
Cash dividends declared ($.20 per share) -- -- (84) (84)
Net income -- -- 2,295 2,295
------ ------- ------- -------
BALANCE AT DECEMBER 25, 1993 418 $2,194 $5,306 $7,500
====== ======= ======= ========
</TABLE>
See accompanying notes.

<PAGE> 5

NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS

ACCOUNTING POLICIES
Fiscal Year. Intel Corporation ("Intel" or "the Company") has a fiscal year that
ends the last Saturday in December. Fiscal years 1993, 1992 and 1991, each
52-week years, ended on December 25, 26 and 28, respectively. The next 53-week
year, fiscal 1994, will end on December 31, 1994.

Basis of Presentation. The consolidated financial statements include the
accounts of Intel Corporation and all of its wholly-owned subsidiaries. All
significant intercompany accounts and transactions have been eliminated.
Accounts denominated in foreign currencies have been remeasured into the
functional currency in accordance with Statement of Financial Accounting
Standards (FAS) No. 52, "Foreign Currency Translation," using the U.S. dollar as
the functional currency.

Cash and Cash Equivalents. Cash and cash equivalents are highly
liquid investments with insignificant interest rate risk and original
maturities of three months or less. They are carried at cost which approximates
fair value.

Investments. The Company accounts for investments at cost pursuant
to FAS No. 12, "Accounting for Certain Marketable Securities," where applicable.
Adoption in fiscal 1994 of FAS No. 115, "Accounting for Certain Investments in
Debt and Equity Securities," is not expected to have a material impact on
Intel's financial statements.

Inventories. Inventories are stated at the lower of cost or market. Cost
is computed on a currently adjusted standard basis (which approximates actual
cost on a current average or first-in, first-out basis). Market is based upon
estimated average selling price reduced by normal gross margin. Inventories at
fiscal year-ends are as follows:

<TABLE>
<CAPTION>
______________________________________________________________________________
(In millions) 1993 1992
- ------------------------------------------------------------------------------
<S> <C> <C>
Materials and purchased parts $216 $105
Work in process 321 220
Finished goods 301 210
----- -----
Total $838 $535
----- -------
</TABLE>

Property, Plant and Equipment. Property, plant and equipment are stated at
cost. Depreciation is computed for financial reporting purposes principally by
use of the straight-line method over the estimated useful lives of the assets.
The Company uses accelerated methods of computing depreciation for tax
purposes.

Deferred Income on Shipments to Distributors. Certain of Intel's sales are made
to distributors under agreements allowing price protection and/or right of
return on merchandise unsold by the distributors. Because of frequent sales
price reductions and rapid technological obsolescence in the industry, Intel
defers recognition of such sales until the merchandise is sold by the
distributors.

Interest. Interest, and gains and losses related to contractual
agreements to hedge certain investment positions and debt (see "Other Financial
Instruments" on page 13) are recorded as net interest income and expense on a
monthly basis. Interest expense capitalized as a component of construction
costs was $8 million, $11 million and $6 million for 1993, 1992 and 1991,
respectively.

Accounting for Income Taxes. During fiscal 1993, the Company adopted
FAS No. 109, "Accounting for Income Taxes," effective as of the beginning of
fiscal 1993. Prior years were accounted for under FAS No. 96. This adoption had
no material effect on Intel's financial statements.

Earnings Per Common and Common Equivalent Share. Earnings per common and common
equivalent share are computed using the weighted average number of outstanding
common shares and dilutive common equivalent shares outstanding. Fully diluted
earnings per share have not been presented as part of the consolidated
statements of income because the differences are insignificant.

Stock Split. Effective May 6, 1993, the Company declared a two-for-one stock
split and increased its authorized shares of Common Stock to 1.40 billion.
Share, per share, Common stock, Capital in excess of par value and warrant
amounts herein have been restated as necessary to reflect the effect of this
stock split.

Reclassifications. Certain amounts reported in previous years have been
reclassified to conform to the 1993 presentation.

COMMON STOCK

Common Stock Purchase Rights. In 1989, the Board of Directors authorized the
issuance of one Common Stock Purchase Right (a "Right") for each share of Common
Stock. The Rights trade automatically with shares of the Company's Common Stock
and may not be exercised or traded separately until certain events occur,
including the announcement of an offer to acquire at least 20% of the Company's
outstanding Common Stock. After becoming exercisable, each Right entitles its
holder to purchase one share of Common Stock of Intel at $260 per share. In
addition, after any person (an "Acquiring Person") acquires 20% or more of the
Company's outstanding Common Stock in a transaction which the Board of
Directors has not determined to be in the best interests of the Company and its
stockholders, each Right (other than those held by the Acquiring Person)
entitles its holder to purchase for the exercise price that number of shares of
Common Stock having a market value of two times the exercise price. Also, if
after a person has become an Acquiring Person, the Company is a party to a
merger or other business combination, each Right (other than Rights held by the
Acquiring Person) entitles its holder to purchase for the exercise price that
number of shares of common stock of the surviving corporation worth two times
the exercise price.

At any time before the tenth day after a person becomes an Acquiring
Person, the Company may redeem the Rights, in whole but not in part, at a
redemption price of $.01 per Right. In addition, at any time after a person
becomes an Acquiring Person and prior to such Acquiring Person owning 50% or
more of the outstanding Common Stock, the Company may exchange the Rights
(other than Rights held by the Acquiring Person), in whole or in part, at an
exchange ratio of one Common Share per Right. The Rights will expire, if not
earlier redeemed or exchanged, on May 1, 1999. The exercise price, redemption
price and exchange ratio are subject to adjustment under certain circumstances.

<PAGE> 6

1998 Step-Up Warrants. In 1993, the Company issued 20 million 1998 Step-Up
Warrants to purchase 20 million shares of Common Stock. This transaction
resulted in an increase of $287 million in Common Stock and Capital in excess
of par value, representing net proceeds from the offering. The Warrants became
exercisable in May 1993 at an effective price of $71.50 per share of Common
Stock, subject to annual increases to a maximum price of $83.50 per share
effective in March 1997. The Warrants expire on March 14, 1998 if not
previously exercised. At prevailing market prices for Intel's Common Stock,
there is no dilutive effect on earnings per share for the periods presented.

Stock Repurchase Program. In 1990, the Board of Directors authorized the
repurchase of up to 40 million shares of Intel's Common Stock in open market or
negotiated transactions. The Company repurchased and retired 6.4 million shares
in 1990; none in 1991 or 1992. During 1993, the Company repurchased and retired
an additional 7.3 million shares at a cost of $391 million. As of December 25,
1993, after reserving shares to cover outstanding put warrants, 11.5 million
shares remained available for repurchase under this authorization.

PUT WARRANTS

In a series of private placements in 1991, 1992 and 1993, the Company sold put
warrants that entitle the holder of each warrant to sell one share of Common
Stock to the Company, at a specified price. Activity during these years is
summarized as follows:

<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------
Cumulative Put Warrants Outstanding
Proceeds -------------------------
Received Number Potential
(In millions) (Paid) of Warrants Obligation
- -----------------------------------------------------------------------------
<S> <C> <C> <C>
December 29, 1990 -- -- --
Sales $ 14 7.0 $140
------- ------ ------
December 28, 1991 14 7.0 140
Sales 43 14.0 373
Repurchases (1) (5.2) (104)
Expirations -- (1.8) (36)
------ -------- -------
December 26, 1992 56 14.0 373
------ -------- --------

Sales 62 10.8 561
Expirations -- (10.0) (246)
-------- ------- --------
December 25, 1993 $118 14.8 $688
======== ======== ==========
</TABLE>

The amount related to Intel's potential repurchase obligation has been
reclassified from Stockholders' Equity to Put Warrants. The 14.8 million put
warrants outstanding at December 25, 1993 expire on various dates between
January 1994 and October 1994, and have exercise prices ranging from $31.50 to
$65.00 per share. There is no significant dilutive effect on earnings per share
for the periods presented.

BORROWINGS

Short-term debt. Short-term debt at December 25, 1993 consisted of $2 million
notes payable, $85 million borrowed under foreign and domestic lines of credit,
$197 million borrowed under reverse repurchase agreements and $115 million
borrowed under other arrangements. At December 25, 1993, the Company and its
subsidiaries had established foreign and domestic lines of credit of
approximately $925 million. These lines are generally renegotiated on an annual
basis. The Company complies with compensating balance requirements related to
certain of these lines of credit; however, such requirements are immaterial and
do not legally restrict the use of cash. The weighted average interest rate on
notes payable, borrowings under lines of credit and reverse repurchase
agreements outstanding at December 25, 1993 was approximately 6.2%. This rate
includes borrowings of $197 million under reverse repurchase agreements at an
average rate of 7.9% that hedge certain foreign currency denominated
investments. Short-term debt is generally due within three months or on demand.
It is carried at cost which approximates fair value due to the short period of
time to maturity.

Commercial Paper. The Company borrows under commercial paper programs under
which the outstanding balance reached $700 million in 1993 and $689 million in
1992. This debt is rated A1+ by Standard and Poor's and P1 by Moody's. The
proceeds are used to fund short-term working capital needs.

Long-term Debt. Long-term debt at fiscal year-ends is as follows:

<TABLE>
<CAPTION>
_____________________________________________________________________________
(In millions) 1993 1992
- -----------------------------------------------------------------------------
<S> <C> <C>
Payable in U.S. dollars:
1983 Series A AFICA Bonds $ 80 $ 80
1983 Series B AFICA Bonds 30 30
Zero Coupon Notes, net of unamortized
discount of $27 ($44 in 1992) 160 143
8 1/8 % Notes 98 98
Other U.S. dollar debt 6 4
Payable in other currencies:
Irish punt due 2018 73 --
Irish punt due 2008 73 --
Other foreign currency debt 4 4
(Less redeemable long-term debt) (98) (110)
-------- --------
Total $426 $249
======== ========
</TABLE>

The $80 million 1983 Series A and $30 million 1983 Series B Bonds were
issued by the Puerto Rico Industrial, Medical and Environmental Pollution
Control Facilities Financing Authority (AFICA). The Company has guaranteed
repayment of principal and interest on these bonds, which are subject to
redemption prior to maturity upon the occurrence of certain events. The bonds
are adjustable and redeemable (at the option of either the Company or the
bondholder) every five years from 1988 through 2008 in accordance with certain
formulas.

<PAGE> 7

The Series A Bonds are due September 1, 2013 and were last repriced and
a portion remarketed on September 1, 1993, with an overall effective interest
rate of 4.1% through August 1998. They are next adjustable and redeemable on
September 1, 1998. As of December 25, 1993, their fair value was $80 million
($81 million at December 26, 1992), based on quoted market prices for similar
securities.

The Series B Bonds are due December 1, 2013 and were last repriced and a
portion remarketed at a discount on December 1, 1993, with an overall effective
interest rate of 4.0% through November 1998. They are next adjustable and
redeemable on December 1, 1998. As of December 25, 1993, their fair value was
$30 million ($31 million at December 26, 1992), based on quoted market prices
for similar securities.

The zero coupon notes are due May 15, 1995 and have an effective yield to
maturity of 11.75%, compounded semiannually, with interest payable at maturity.
In 1992, the Company repurchased $29 million principal amount of the notes on
the open market. As of December 25, 1993, the fair value of the notes was $178
million ($164 million at December 26, 1992), based on quoted market prices for
similar securities.

The 8 1/8% notes are due March 15, 1997 and are redeemable on or after March
15, 1994 at the option of the Company. Subsequent to year-end 1993, the Company
issued notice of its intention to redeem the outstanding notes in March 1994.
As of December 25, 1993, their fair value was $99 million ($104 million at
December 26, 1992), based on quoted market prices.

In January and July 1993, the Company borrowed 35 million and 11 million Irish
punts (approximate U.S. dollar equivalent of $56 million and $17 million,
respectively), maturing December 15, 2018 in connection with the financing of a
factory in Ireland. The debt has an effective interest rate of 8.7% until
January 1, 2007 and thereafter of 11.7% until maturity. Proceeds have been
invested in long-term, Irish punt denominated, interest-bearing instruments
that effectively hedge foreign currency exposure. As of December 25, 1993, the
fair value of these borrowings was $66 million, based on current exchange
rates.

In October 1993, the Company borrowed 50 million Irish punts (approximate U.S.
dollar equivalent of $73 million) maturing October 14, 2008 in connection with
the financing of equipment in Ireland. This debt has an effective rate of 5.1%
through October 14, 1994, and the rate is reset annually. Proceeds have been
invested in long-term, Irish punt denominated, interest-bearing instruments
that effectively hedge foreign currency exposure. As of December 25, 1993, the
fair value of these borrowings was $71 million, based on current exchange
rates.

Other U.S. dollar and foreign currency debt are at floating interest rates. As
of December 25, 1993, fair value approximated carrying value since this debt is
repriced frequently at market rates.

During 1993, the Company filed a shelf registration statement with the SEC
covering various securities. When combined with previous registration
statements, this filing gave Intel the authority to issue up to $3.2 billion in
the aggregate of Common Stock, Preferred Stock, depositary shares, debt
securities and warrants to purchase the Company's Common Stock, Preferred Stock
and debt securities, and, subject to certain limits, stock index warrants and
foreign currency exchange units. In March 1993, Intel completed a public
offering of Step-Up Warrants under this registration (see page 11) and may
issue additional securities having an aggregate public offering price of
approximately $1.4 billion.

As of December 25, 1993, aggregate debt maturities are as follows: 1994-$98
million; 1995-$189 million; 1996-none; 1997-none; 1998-$110 million; and
thereafter-$154 million.

INVESTMENTS

Investments consist of time deposits, certificates of deposit, U.S. and
European commercial paper, Euro-time deposits, U.S. and foreign government
obligations, U.S. government agencies' obligations, corporate bonds, fixed and
floating rate notes, loan participations, municipal obligations, collateralized
mortgage obligations, equity investments, money market preferred stock and
investments made under repurchase agreements. Investments denominated in
foreign currencies are hedged by currency forward contracts, currency interest
rate swaps or foreign currency borrowings. Investments with maturities of
greater than one year are classified as long-term.

At December 25, 1993, the fair value of long-term investments at fixed rates
was $203 million ($49 million at December 26, 1992), compared to $207 million
carrying value ($46 million at December 26, 1992). Fair values of fixed rate
investments are based on quoted market prices for similar securities or current
exchange rates. The fair value of long-term investments at floating rates, or
swapped to floating rates with interest rate swaps, approximates carrying value
since they are repriced frequently at market rates. The fair value of
short-term investments approximates carrying value due to either the short
period of time to maturity or the fact that they have been swapped to floating
rates with interest rate swaps.

Investments consist primarily of A2 or better quality bonds and investments
with A2 or better rated counterparties for long-term transactions, and A1 or P1
or better rated counterparties for short-term transactions. Foreign government
regulations imposed upon investment alternatives of foreign subsidiaries or the
absence of A2 rated financial institutions in some countries result in some
minor exceptions. Collateral has been obtained and secured from counterparties
against investments whenever deemed necessary. At December 25, 1993,
investments were placed with approximately 100 different financial institutions
or other issuers, and no individual security, financial institution or issuer
exceeded 10% of total investments.

<PAGE> 8

OTHER FINANCIAL INSTRUMENTS

The Company enters into various off-balance-sheet financial transactions
including currency forward contracts, currency options, interest rate swaps and
currency interest rate swaps to hedge its currency, equity and interest rate
exposures. Those instruments involve, to varying degrees, elements of market
and interest rate risk in excess of the amount recognized in the consolidated
balance sheets.

At December 25, 1993, the outstanding face amounts of currency forward
contracts totaled approximately $620 million ($462 million at December 26,
1992), including $413 million ($80 million at December 26, 1992), which hedge
foreign currency investments. Other outstanding contracts include $28 million
of currency options ($24 million at December 26, 1992), $110 million of debt
interest rate swaps ($258 million at December 26, 1992) and $1,069 million of
investment interest rate swaps ($714 million at December 26, 1992).

While the contract or notional amounts often are used to express the volume of
these transactions, the amounts potentially subject to credit risk (arising
from the possible inability of counterparties to meet the terms of their
contracts) are generally limited to the amounts, if any, by which the
counterparties obligations exceed the obligations of the Company. At December
25, 1993, the fair value of outstanding off-balance-sheet assets based on
pricing models using current market rates were: currency forward contracts, $9
million ($1 million at December 26, 1992); and debt interest rate swaps, none
($14 million at December 26, 1992). The fair value of investment interest rate
swaps has been included with the fair value of the related underlying
investments. These off-balance-sheet instruments offset currency and interest
rate exposure of underlying assets, liabilities and other obligations. The
Company controls credit risk through credit approvals, limits and monitoring
procedures. Credit rating policies similar to those for investments are
followed for off-balance-sheet transactions.

CONCENTRATIONS OF CREDIT RISK

Financial instruments that potentially subject the Company to concentrations of
credit risk consist principally of investments and trade receivables. Intel
places its investments with high-credit-quality financial institutions and, by
policy, limits the amount of credit exposure to any one financial institution.
A majority of the Company's trade receivables are derived from sales to
manufacturers of microcomputer systems, with the remainder spread across
various other industries. The Company keeps pace with the evolving computer
industry and has adopted credit policies and standards to accommodate the
industry's growth and inherent risk. Management believes that any risk of
accounting loss is significantly reduced due to the diversity of its products,
end customers and geographic sales areas. Intel performs ongoing credit
evaluations of its customers financial condition and requires collateral, such
as letters of credit and bank guarantees, whenever deemed necessary.

INTEREST INCOME AND OTHER
<TABLE>
<CAPTION>
(In millions) 1993 1992 1991
- -------------------------------------------------------------------------------
<S> <C>
Interest income $155 $141 $194
Foreign currency (losses) gains -- (1) 4
Other income (loss) 33 (7) (1)
------- ------ -------
Total $188 $133 $197
======= ======= =======
</TABLE>

Other income for 1993 includes nonrecurring gains from the sale of certain
foreign benefits related to the Company's Irish expansion and dividend income
earned on equity investments. Other loss for 1992 includes a provision to cover
the Company's liability for damages payable under an arbitration decision,
partially offset by income from incentive credits. Other loss for 1991 includes
a loss on the disposal of certain portions of the Company's customer service
operations and the write-down of goodwill related to an acquisition, offset in
part by gains on the sale of investments and land.

PROVISION FOR TAXES

In 1993, Intel adopted FAS No. 109, "Accounting for Income Taxes," effective as
of the beginning of fiscal year 1993. Prior years were accounted for under FAS
No. 96 and have not been restated. This adoption had no material effect on the
Company's financial statements.

Income before taxes and the provision for taxes consist of the following:

<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------
(In millions) 1993 1992 1991
- ---------------------------------------------------------------------------------
<S> <C>
Income before taxes:
U.S. $2,587 $ 924 $ 671
Foreign 943 645 524
------- ------- -------
Total income before taxes: $3,530 $1,569 $1,195
======= ======= ========
Provision for taxes:
Federal:
Current $ 946 $ 339 $ 271
Deferred 35 6 (16)
------- ------- --------
981 345 255
------- -------- --------
State:
Current 150 71 58

Foreign:
Current 127 79 66
Deferred (23) 7 (3)
-------- ------ -------
104 86 63
-------- -------- -------
Total provision for taxes $1,235 $ 502 $ 376
====== ======= =======
Effective tax rate 35.0% 32.0% 31.5%
======= ======= =======
</TABLE>

<PAGE> 9

The tax benefit associated with disqualifying dispositions of stock
options and the employee stock purchase plan reduced taxes currently payable
for 1993 by $68 million. Such benefits are credited to Common Stock and Capital
in excess of par value when realized.

The provision for taxes reconciles to the amount computed by applying
the statutory federal rate of 35% for 1993 (34% for 1992 and 1991) to income
before taxes as follows:
<TABLE>
<CAPTION>
(In millions) 1993 1992 1991
- -------------------------------------------------------------------------------
<S> <C> <C> <C>
Computed expected tax $1,235 $533 $406
State taxes, net of federal benefits 98 47 38
Research and experimental credit (23) (7) (12)
Foreign sales corporation benefit (46) (36) (35)
Reduction of taxes provided in
prior periods -- -- (20)
Provision for combined foreign and
U.S. taxes on certain foreign income
at rates greater (less) than
U.S. rate 1 (17) (15)
Other (30) (18) 14
-------- -------- -------
Provision for taxes $1,235 $502 $376
======== ======== =======
</TABLE>

Deferred income taxes reflect the net tax effects of temporary differences
between the carrying amount of assets and liabilities for financial reporting
purposes and the amounts used for income tax purposes. Significant components
of the Company's deferred tax assets and liabilities as of the end of fiscal
1993 are as follows:

<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------
(In millions) 1993
- -----------------------------------------------------------------------------------
<S> <C>
Deferred tax assets:
Accrued compensation and other benefits $ 44
Accrued advertising 18
Deferred income 76
Inventory valuation 77
Interest and taxes 72
Other, net 23
------
310
Deferred tax liabilities:
Depreciation (245)
Unremitted earnings of certain subsidiaries (52)
-------
(297)
-------
Net deferred tax asset $ 13
========
</TABLE>

During 1991 and 1992, in accordance with FAS No. 96, deferred income taxes were
provided for significant temporary differences. The principal items making up
the 1992 deferred tax expense included $42 million for depreciation reduced by
$18 million for inventory valuation and other reserves, and $12 million of
other items. In 1991, deferred tax expense included $36 million for
depreciation and other items, reduced by $55 million for inventory valuation
and other reserves.

The Company's U.S. income tax returns for the years 1978 through 1982 have been
examined by the Internal Revenue Service (IRS). In June 1989, the Company
received a notice of proposed deficiencies from the IRS totaling $36 million,
exclusive of penalties and interest, for the years 1978 through 1982. These
proposed deficiencies relate primarily to subsidiary operations in Puerto Rico.
In September 1989, the Company filed a petition in the U.S. Tax Court
contesting these proposed deficiencies. The Company has reached final
settlement of certain issues with the IRS. As a result of this settlement,
Intels 1991 provision for taxes reflected a $20 million reduction of taxes
provided in prior periods. In June 1993, the U.S. Tax Court ruled in favor of
the Company on one additional issue and for the IRS on another, smaller issue.
These rulings can be appealed by either party. Management believes that
adequate amounts of tax and related interest and penalties, if any, have been
provided for any adjustments which may result from the unsettled portions of
the case.

The Company's U.S. income tax returns for the years 1983 through 1987 are
presently under examination by the IRS. Final proposed adjustments have not yet
been received for these years. In addition, examination by the IRS of the
Company's income tax returns for the years 1988 through 1990 began in 1993.
Management believes that adequate amounts of tax and related interest and
penalties, if any, have been provided for any adjustments which may result for
the years under examination.

EMPLOYEE BENEFIT PLANS

Stock Option Plans. Intel has stock option plans (hereafter referred to as the
EOP Plans) under which officers, key employees and non-employee directors may
be granted options to purchase shares of the Company's authorized but unissued
Common Stock. The Company also has an Executive Long-Term Stock Option Plan
(ELTSOP) under which certain key executive officers may be granted options to
purchase shares of the Company's authorized but unissued Common Stock. Under
all the plans, the option purchase price is not less than the fair market value
at the date of grant.

<PAGE> 10

Options currently expire no later than ten years from the grant date.
Proceeds received by the Company from stock option exercise are credited to
Common Stock and Capital in excess of par value.

Additional information with respect to EOP Plan activity is as follows:

<TABLE>
<CAPTION>
- -----------------------------------------------------------------------
Outstanding Options
Shares --------------------
Available Number Aggregate
(In millions) For Options of Shares Price
- ------------------------------------------------------------------------
<S> <C> <C> <C>
December 29, 1990 43.2 39.8 $505
Grants (6.7) 6.7 154
Exercises -- (5.9) (48)
Cancellations 1.6 (1.6) (26)
-------- ------- ---------
December 28, 1991 38.1 39.0 585
Grants (7.3) 7.3 195
Exercises -- (7.6) (78)
Cancellations 1.9 (1.9) (33)
------- ------- --------
December 26, 1992 32.7 36.8 669
Grants (7.6) 7.6 357
Exercises -- (4.5) (56)
Cancellations 0.9 (0.9) (24)
------- ------- -------
December 25, 1993 26.0 39.0 $946
======== ======= =======
Options exercisable at:
December 28, 1991 11.5 $101
December 26, 1992 9.8 $109
December 25, 1993 10.2 $135
</TABLE>

The range of exercise prices for options outstanding at December 25,
1993 was $6.08 to $71.25. These options will expire if not exercised at
specific dates ranging from January 1994 to December 2003. Exercise prices for
options exercised during the three-year period ended December 25, 1993 ranged
from $3.52 to $35.13.

Activity for the ELTSOP Plan is summarized below:
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------
Outstanding Options
Shares --------------------
Available Number Aggregate
(In millions) For Options of Shares Price
- ----------------------------------------------------------------------------------
<S> <C> <C> <C>
December 29, 1990 6.0 4.0 $58
Exercises -- (0.1) (2)
Cancellations 0.4 (0.4) (5)
------- -------- --------
December 28, 1991 6.4 3.5 51
Exercises -- (0.3) (4)
Cancellations 0.2 (0.2) (3)
------- -------- -------
December 26, 1992 6.6 3.0 44
Grants (0.2) 0.2 11
Exercises -- (0.4) (6)
-------- --------- --------
December 25, 1993 6.4 2.8 $49
======== ========= =========

Options exercisable at:
December 28, 1991 0.4 $ 6
December 26, 1992 0.5 $ 7
December 25, 1993 0.7 $11
</TABLE>

The exercise prices of options outstanding at December 25, 1993 ranged from
$14.63 to $54.63. These options will expire if not exercised at specific dates
ranging from April 1999 to July 2003. The price range for options exercised
during the three-year period ended December 25, 1993 was $14.63 to $14.69.

Stock Participation Plan. Under this plan, qualified employees may purchase
shares of Intel's Common Stock at 85% of fair market value at specific,
predetermined dates. Of the 59.0 million shares authorized to be issued under
the plan, as amended, 17.3 million shares were available for issuance at
December 25, 1993. Employees purchased 2.2 million shares in 1993 (2.6 million
and 2.5 million in 1992 and 1991, respectively) for $71 million ($57 million
and $48 million in 1992 and 1991, respectively).

Retirement Plans. The Company provides profit-sharing retirement plans (the
"Profit-Sharing Plans") for the benefit of qualified employees in the U.S. and
Puerto Rico. The plans are designed to provide employees with an accumulation
of funds at retirement and provide for annual discretionary contributions to
trust funds.

Effective December 1991, the Company adopted a non-qualified
profit-sharing retirement plan (the "Non-Qualified Plan") for the benefit of
qualified employees in the U.S. This plan is designed to permit certain
discretionary employer contributions in excess of the tax limits applicable to
the profit-sharing retirement plans discussed above and to permit certain
employee deferrals in excess of certain tax limits. This plan is intended to be
an unfunded plan.

The Company accrued $103 million for the Profit-Sharing Plans and the
Non-Qualified Plan in 1993 ($93 million in 1992 and $136 million in 1991). The
Company expects to fund approximately $107 million for the 1993 contribution to
the Profit-Sharing Plans and to allocate approximately $2 million for the
Non-Qualified Plan. A portion of this contribution will be funded from amounts
carried forward from prior years. The remaining amount carried forward from
prior years, $120 million, is expected to be contributed to these plans when
allowable under IRS regulations and plan rules.

Contributions made by the Company vest based on the employee's years of
service. Vesting begins after three years of service in 20% annual increments
until the employee is 100% vested after seven years.

The Company provides qualified defined benefit pension plans for the benefit of
qualified employees in the U.S. and Puerto Rico. Each plan provides for
minimum pension benefits that are determined by a participant's years of
service, final average compensation (taking into account the participant's
social security wage base) and the value of the Company's contributions, plus
earnings, in the Profit-Sharing Plan. If the balance in the participant's
Profit-Sharing Plan exceeds the pension guarantee, the participant will receive
benefits from the Profit-Sharing Plan only. Intel's funding policy is
consistent with the funding requirements of federal laws and regulations.

<PAGE> 11

Pension expense for 1993, 1992 and 1991 for the U.S. and Puerto Rico plans
included the following components:

<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------
(In millions) 1993 1992 1991
- -------------------------------------------------------------------------------
<S> <C> <C> <C>
Service cost-benefits
earned during the year $1 $1 $1
Interest cost of projected
benefit obligation 1 1 1
Actual investment (return)
on plan assets (1) -- (1)
Net amortization and deferral -- (1) 1
------ ------ -----
Net pension expense $1 $1 $2
====== ====== ======
</TABLE>
The funded status of these plans as of December 25, 1993 and December 26, 1992
is as follows:
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------
(In millions) 1993 1992
- -------------------------------------------------------------------------------------------
<S> <C> <C>
Vested benefit obligation $ (2) $(1)
------- --------
Accumulated benefit obligation $ (2) $(1)
------- --------
Projected benefit obligation $ (8) $(8)
Fair market value of plan assets 6 5
-------- --------
Projected benefit obligation
(in excess of) plan assets (2) (3)
Unrecognized net (gain) (10) (9)
Unrecognized prior service cost 5 6
------- --------
Accrued pension costs $ (7) $(6)
======== =========
</TABLE>
At fiscal year-ends, the weighted average discount rates and long-term rates
for compensation increases used for estimating the benefit obligations and the
expected return on plan assets were as follows:
<TABLE>
<CAPTION>
1993 1992 1991
- -------------------------------------------------------------------------------------
<S> <C> <C> <C>
Discount rate 7.0% 8.5% 8.5%
Expected long-term return on assets 8.5% 8.5% 8.5%
Average increase in
compensation levels 5.0% 5.5% 5.5%
</TABLE>

Plan assets of the U.S. and Puerto Rico plans consist primarily of listed
stocks and bonds, repurchase agreements, money market securities, U.S.
government securities and stock index derivatives.

The Company has defined benefit pension plans in certain foreign countries
where required by statute. The Company's funding policy for foreign defined
benefit plans is consistent with the local requirements in each country.
Pension expense for 1993, 1992 and 1991 for the foreign plans included the
following:
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------
(In millions) 1993 1992 1991
- -------------------------------------------------------------------------------
<S> <C> <C> <C>
Service cost-benefits
earned during the year $5 $5 $5
Interest cost of projected
benefit obligation 6 5 3
Actual investment (return)
on plan assets (7) -- (8)
Net amortization and deferral 2 (5) 5
------ ------ -----
Net pension expense $6 $5 $5
====== ====== ======
</TABLE>

The funded status of the foreign defined benefit plans as of December 25, 1993
and December 26, 1992 is summarized below:
<TABLE>
Assets Accumulated
Exceed Benefits
1993 Accumulated Exceed
(In millions) Benefits Assets
- ------------------------------------------------------------------------------------------------------
<S> <C> <C>
Vested benefit obligation $(27) $ (3)
-------- ---------
Accumulated benefit obligation $(28) $ (7)
--------- ---------
Projected benefit obligation $(39) $(12)
Fair market value of plan assets 41 2
--------- ---------
Projected benefit obligation
less than (in excess of) plan assets 2 (10)
Unrecognized net loss -- --
Unrecognized net transition obligation -- 1
---------- -----------
Prepaid (accrued) pension costs $ 2 $ (9)
---------- ------------
</TABLE>

<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------
Assets Accumulated
Exceed Benefits
1992 Accumulated Exceed
(In millions) Benefits Assets
- ------------------------------------------------------------------------------------------------------
<S> <C> <C>
Vested benefit obligation $(23) $(2)
-------- ---------
Accumulated benefit obligation $(24) $(5)
--------- ---------
Projected benefit obligation $(36) $(9)
--------- ---------
Fair market value of plan assets 32 2
Projected benefit obligation
(in excess of) plan assets (4) (7)
Unrecognized net loss (gain) 6 (1)
Unrecognized net transition obligation -- 1
---------- -----------
Prepaid (accrued) pension costs $ 2 $(7)
---------- ------------
</TABLE>

<PAGE> 12

At fiscal year-ends, the weighted average discount rates and long-term
rates for compensation increases used for estimating the benefit obligations
and the expected return on plan assets were as follows:

<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------
1993 1992 1991
- -------------------------------------------------------------------------------------
<S> <C> <C> <C>
Discount rate 5.5%-14% 5.5%-24% 5.5%-24%
Expected long-term return on assets 5.5%-14% 5.5%-24% 5.5%-24%
Average increase in
compensation levels 4.5%-11% 4.5%-18% 4.5%-18%
</TABLE>

Plan assets of the foreign plans consist primarily of listed stocks, bonds and
cash surrender value life insurance policies.

Other Postretirement Benefits. As of December 25, 1993, Intel does not offer
the types of benefits covered by FAS No. 106, "Employers' Accounting for
Postretirement Benefits Other Than Pensions," and thus is not affected by this
statement. The Company also does not expect to be materially impacted by FAS
No. 112, "Employers' Accounting for Postemployment Benefits," which is effective
for years beginning after December 15, 1993.

COMMITMENTS

The Company leases a portion of its capital equipment and certain of its
facilities under leases that expire at various dates through 2009. Rental
expense was $35 million in 1993, $39 million in 1992 and $50 million in 1991.
Minimum rental commitments under all non-cancelable leases with an initial term
in excess of one year are payable as follows: 1994-$12 million; 1995-$8
million; 1996-$4 million; 1997-$3 million; 1998-$2 million; 1999 and beyond $2
million. Commitments for construction or purchase of property, plant and
equipment approximated $654 million at December 25, 1993. In connection with
certain contract manufacturing arrangements, Intel had minimum purchase
commitments of approximately $300 million at December 25, 1993 for flash
memories and other products intended for sale.

CONTINGENCIES

On August 29, 1991, the Company was sued by Advanced Micro Devices, Inc. (AMD)
in the U.S. District Court for the Northern District of California, alleging
violations of the U.S. antitrust laws and claiming $2 billion damages and
requesting treble damages under the antitrust laws. Intel believes the suit to
be without merit and has filed motions for dismissal and for summary judgment.
Intel's motion to dismiss a significant portion of AMD's allegations was
granted on December 17, 1991. A trial on the remaining issues is currently
scheduled for October 1994. Intel intends to continue to defend these
allegations vigorously. While the ultimate outcome of these claims cannot be
determined at this time, management, including internal counsel, does not
believe that the ultimate outcome will have a material adverse impact on the
Company's financial position.

The Company has been named to the California and Federal Superfund lists for
three of its sites and has completed, along with two other companies, a
Remedial Investigation/Feasibility Study with the federal Environmental
Protection Agency (EPA) to evaluate the ground water in a certain area related
to one of its sites. The EPA has issued a Record of Decision with respect to a
ground-water cleanup plan at that site, including expected costs to complete.
Under the California and Federal Superfund statutes, liability for cleanup of
this site is joint and several. The Company, however, has reached agreement in
principle with those same two companies which significantly limits the
Company's liabilities under the proposed cleanup plan. In addition, the Company
has done extensive cleanup and studies of its 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, even if joint and
several liability were to be assessed.

The Company is party to various other legal proceedings. In the
opinion of management, including internal counsel, these proceedings will not
have a material adverse effect on the financial position or overall trends in
results of operations of the Company.

INDUSTRY SEGMENT REPORTING

Intel and its subsidiaries operate in one dominant industry segment. The
Company is engaged principally in the design, development, manufacture and sale
of microcomputer components and related products at various levels of
integration. One significant customer accounted for 10% of revenues in 1993. No
customers exceeded 10% of revenues in 1992 or 1991. Major operations outside
the United States include manufacturing facilities in Ireland, Israel, Malaysia
and the Philippines, and sales subsidiaries in Japan, Asia- Pacific, and
throughout Europe and other parts of the world. Summary balance sheet
information for operations outside the United States at fiscal year-ends is as
follows:
<TABLE>
- --------------------------------------------------------------------------------
<CAPTION>
(In millions) 1993 1992
- -------------------------------------------------------------------------------------
<S> <C> <C>
Total assets $2,192 $1,715
Total liabilities $ 637 $ 434
Net property, plant and equipment $1,042 $ 578
</TABLE>

<PAGE> 13

Geographic information for the three years ended December 25, 1993 is presented
in the table below. Transfers between geographic areas are accounted for at
amounts which are generally above cost and consistent with rules and
regulations of governing tax authorities. Such transfers are eliminated in the
consolidated financial statements. Operating income by geographic segment does
not include an allocation of general corporate expenses. Identifiable assets
are those assets that can be directly associated with a particular geographic
area. Corporate assets include cash and cash equivalents, short-term
investments, deferred tax assets, other current assets, long-term investments
and certain other assets.

<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------
Transfers
Sales to between
unaffiliated geographic Net Operating Identifiable
(In millions) customers areas revenues income assets
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1993

United States.......... $4,416 $3,406 $7,822 $2,896 $ 5,379
Europe................. 2,476 51 2,527 309 1,214
Japan.................. 678 119 797 108 351
Asia-Pacific........... 1,212 745 1,957 132 420
Other.................. -- 566 566 348 207
Eliminations........... -- (4,887) (4,887) 85 (1,123)
Corporate.............. -- -- -- (486) 4,896
--------- ----------- --------- --------- --------
Consolidated........... $8,782 -- $8,782 $3,392 $11,344
--------- ----------- --------- -------- ---------
1992

United States.......... $3,018 $2,339 $5,357 $1,313 $ 3,761
Europe ................ 1,435 47 1,482 160 937
Japan ................. 452 71 523 54 282
Asia-Pacific........... 939 595 1,534 127 321
Other.................. -- 444 444 269 175
Eliminations........... -- (3,496) (3,496) 28 (751)
Corporate.............. -- -- -- (461) 3,364
--------- --------- ---------- ------- ---------
Consolidated........... $5,844 -- $5,844 $1,490 $ 8,089
--------- ---------- ----------- -------- ----------
1991
United States.......... $2,329 $1,949 $4,278 $ 943 $ 3,088
Europe................. 1,057 24 1,081 114 621
Japan.................. 493 37 530 40 252
Asia-Pacific........... 900 467 1,367 121 209
Other.................. -- 308 308 165 138
Eliminations........... -- (2,785) (2,785) 74 (700)
Corporate.............. -- -- -- (377) 2,684
--------- --------- ---------- -------- ---------
Consolidated........... $4,779 -- $4,779 $1,080 $ 6,292
--------- ---------- --------- -------- ---------
</TABLE>

SUPPLEMENTAL INFORMATION (unaudited)

Quarterly information for each of the two years in the period ended December
25, 1993 is presented on page 23.

<PAGE> 14

REPORT OF ERNST & YOUNG,
INDEPENDENT AUDITORS

THE BOARD OF DIRECTORS AND STOCKHOLDERS,
INTEL CORPORATION

We have audited the accompanying consolidated balance sheets of Intel
Corporation as of December 25, 1993 and December 26, 1992, and the related
consolidated statements of income, stockholders' equity, and cash flows for
each of the three years in the period ended December 25, 1993. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the consolidated financial position of Intel Corporation
at December 25, 1993 and December 26, 1992, and the consolidated results of its
operations and its cash flows for each of the three years in the period ended
December 25, 1993, in conformity with generally accepted accounting principles.

/s/ Ernst & Young

San Jose, California
January 17, 1994

<PAGE> 15
FINANCIAL SUMMARY
TEN YEARS ENDED
DECEMBER 25, 1993
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Net investment Long-term Proceeds from Additions to
in Property, Total Debt & Put Stockholders' Employee Stock Property, Plant
Plant & Equip. Assets Warrants Equity Plans & Tax & Equipment
Benefits
(In millions)
<S> <C> <C> <C> <C> <C> <C>
1993 $3,996 $11,344 $1,114 $7,500 $201 $1,933
1992 $2,816 $ 8,089 $ 622 $5,445 $193 $1,228
1991 $2,163 $ 6,292 $ 503 $4,418 $133 $ 948
1990 $1,658 $ 5,376 $ 345 $3,592 $101 $ 680
1989 $1,284 $ 3,994 $ 412 $2,549 $ 78 $ 422
1988 $1,122 $ 3,550 $ 479 $2,080 $ 82 $ 477
1987 $ 891 $ 2,499 $ 298 $1,276 $ 54 $ 302
1986 $ 779 $ 1,977 $ 287 $1,245 $ 27 $ 155
1985 $ 848 $ 2,153 $ 271 $1,421 $ 33 $ 236
1984 $ 778 $ 2,029 $ 146 $1,360 $ 37 $ 388
</TABLE>

<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------
Net Cost of Research Operating Net Earnings Dividends
Revenues Sales & Development Income Income (Loss) Declared
(In millions (Loss) (Loss) Per Share Per Share
- --except per
share amounts)
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1993 $8,782 $3,252 $970 $3,392 $2,295 $ 5.20 $0.20
1992 $5,844 $2,557 $780 $1,490 $1,067 $ 2.49 $0.10
1991 $4,779 $2,316 $618 $1,080 $ 819 $ 1.96 --
1990 $3,921 $1,930 $517 $ 858 $ 650 $ 1.60 --
1989 $3,127 $1,721 $365 $ 557 $ 391 $ 1.04 --
1988 $2,875 $1,506 $318 $ 594 $ 453 $ 1.26 --
1987 $1,907 $1,044 $260 $ 246 $ 248 $ 0.69 --
1986 $1,265 $ 861 $228 $ (195) $ (203) $(0.58) --
1985 $1,365 $ 943 $195 $ (60) $ 2 $ 0.00 --
1984 $1,629 $ 883 $180 $ 250 $ 198 $ 0.57 --
</TABLE>

Per share information for 1984-1992 has been adjusted for the 2-for-1 stock
split effective May 1993.
<PAGE> 16

Management's Discussion and Analysis of
Financial Condition and Results of Operations

RESULTS OF OPERATIONS

Intel posted outstanding financial results in 1993, breaking previous
records for both revenues and net income. Net revenues were $8.78 billion, a
50% increase compared to the previous mark set in 1992. Net income increased
even more impressively in 1993, rising to $2.30 billion -- a 115% increase over
1992's results. From 1991 to 1992, revenues and net income increased by 22% and
30%, respectively.

The continuing shift in PC market demand toward higher performance
microprocessors was reflected in the Company's revenue trends during the
1991-1993 period. Higher unit sales of progressively faster, more advanced
members of the Intel486(TM) CPU family drove most of the overall growth from
1991 through 1993. Other product areas, including local area networking, flash
memory and embedded control also made noteworthy contributions to revenue
growth over this period. Revenues from mature products such as the Intel386(TM)
CPU family, math coprocessors and EPROMs declined, as demand and capacity moved
to newer technologies such as the Intel486 CPU family and flash memory (Graph
Omitted).

From 1992 to 1993, higher unit sales of the Intel486 CPU family, particularly
advanced offerings such as the IntelDX2(TM) microprocessor, were responsible for
most of the increase in the Company's revenues. Intel launched the Pentium(TM)
processor in 1993 and it began to contribute significantly to revenue growth in
the fourth quarter of the year. New product introductions and success in
existing markets resulted in higher revenues for personal computer platforms,
networking and communications, flash memory and embedded control products.

Revenue growth from 1991 to 1992 was likewise driven by higher volumes of
members of the Intel486 CPU family, partially offset by lower average selling
prices and volumes for Intel386 microprocessors and math coprocessors.

Cost of sales increased by 27% from 1992 to 1993 and by 10% from 1991 to 1992.
The higher growth experienced in 1993 reflects the costs associated with
increased volumes of the Intel486 CPU family. Cost of sales increased
significantly from the third to the fourth quarter of 1993, primarily due to
higher factory start-up costs and greater proportions of costs of flash memory
and system-level products in the product mix, resulting in a quarter-to-quarter
decrease in gross margin percentage.

Sales of the Intel486 CPU family of microprocessors comprised a majority of the
Company's revenues and a substantial majority of its gross margin in 1992 and
1993. In 1991, sales of the Intel386 and Intel486 CPU families of
microprocessors comprised a majority of the Company's revenues and a
substantial majority of its gross margin.

As a percentage of revenue, research and development expenses decreased to 11%
in 1993, compared to 13% in both 1992 and 1991. In absolute terms, however,
research and development spending grew by 24%, as the Company continued to
invest in internal technology development programs, particularly for
microprocessors.

The growth in marketing and administrative expenses from 1991 through 1993 was
fueled by higher spending for personnel expenses related to overall business
growth and strategic marketing, including brand awareness merchandising and the
Company's Intel Inside(R) cooperative advertising program. Bad debt expenses,
which increased significantly from 1991 to 1992 due to volatile industry
conditions and changes in Intel's customer base, were lower in 1993. As a
percentage of revenue, marketing, general and administrative expenses decreased
to 13% in 1993, compared to 17% in 1992 and 16% in 1991 (Graph Omitted).

The decreases in interest expense from 1992 to 1993 and from 1991 to 1992 were
primarily the result of lower average interest rates on borrowings.

Interest and other income was $188 million, $133 million and $197 million in
1993, 1992 and 1991, respectively. The increase from 1992 to 1993 includes
fourth quarter gains of $27 million from the sale of certain foreign benefits
related to a plant expansion in Ireland. Interest and other income in 1992 was
reduced by a $15 million charge to income to cover damages payable to Advanced
Micro Devices, Inc. (AMD) as part of an arbitration decision. In addition to
the AMD charge, lower average interest rates on investments contributed to the
decrease from 1991 to 1992, partially offset by higher average investment
balances in 1992 (Graph Omitted).

The effective income tax rate rose to 35.0% in 1993 compared to 32.0% and 31.5%
in 1992 and 1991, respectively. The higher rate in 1993 resulted from an
increase in the federal statutory rate and from the fact that favorably treated
income and tax credits have not grown as rapidly as overall pretax income. The
adoption of FAS No. 109, "Accounting for Income Taxes," effective at the
beginning of 1993, had no material impact on Intel's financial statements. The
slight increase in rate in 1992 compared to 1991 was primarily attributable to
a $20 million adjustment related to the settlement of a tax dispute with the
IRS in 1991.
<PAGE> 17

FINANCIAL CONDITION

The Company enters 1994 in very strong financial condition. As of December 25,
1993, total cash and short- and long-term investments were $4.55 billion, an
increase of $1.22 billion compared to December 26, 1992.

Cash generated from operating activities rose to $2.80 billion in 1993 compared
to $1.64 billion and $1.35 billion in 1992 and 1991, respectively, primarily
due to higher net income. The Company funded most of its investment needs
during 1991-1993 with cash generated from operations.

Investing activities used $3.34 billion in cash during 1993, compared to $1.48
billion during 1992 and $1.46 billion during 1991. Capital expenditures for
the property, plant and equipment necessary for future business requirements,
including increasingly complex manufacturing capacity, grew substantially over
the 1991-1993 period. Capital expenditures totaled $1.93 billion in 1993,
compared to $1.23 billion in 1992 and $948 million in 1991. The Company expects
to spend an additional $2.4 billion for capital additions in 1994, and
approximately $654 million had been committed as of December 25, 1993 for the
construction or purchase of property, plant and equipment.

Cash provided by financing activities totaled $352 million, $168
million and $9 million in 1993, 1992 and 1991, respectively. Major sources of
financing in 1993 included the Company's public offering of the 1998 Step-Up
Warrants, which resulted in proceeds of $287 million; higher levels of debt,
primarily for investment arbitrage purposes; and sales of stock to employees.
Intel completed a series of stock repurchases during 1993 at an aggregate cost
of $391 million (Graph Omitted).

As part of its authorized stock repurchase program, the Company had the
potential obligation at the end of 1993 to buy back 14.8 million shares of its
Common Stock at an aggregate price of $688 million. Other sources of liquidity
include credit lines of approximately $925 million, only $85 million of which
was outstanding at the end of 1993, and authorized commercial paper borrowings
of $700 million, none of which was outstanding at year-end. The Company can
also issue an aggregate of approximately $1.4 billion in debt, equity and other
securities remaining under a consolidated SEC shelf registration filed in 1993.

The Company believes that it has the financial resources needed to meet
business requirements in the foreseeable future, including capital
expenditures, strategic operating programs and the dividend program.

OUTLOOK

Despite the excellent operating results and solid financial strength described
herein, the complex and dynamic nature of the Company's business make future
revenue and profitability trends difficult to predict.

Among the uncertainties facing Intel are business conditions and growth in the
personal computer industry as a whole; competitive factors, including rival
chip architectures, imitators of the Company's key microprocessors, and price
pressures for standard semiconductors and integrated products; manufacturing
capacity and the continued availability of subcontractor-supplied memory
products; and ongoing litigation involving Intel intellectual property.

In June 1992, a jury decided that AMD was not licensed to copy microcode
contained in the Intel287(TM) math coprocessor. In December 1992, that
ruling was extended to include Intel microprocessors. In 1993, the judge
ordered a new trial. On March 10, 1994, a second jury found that AMD does
have a license to copy microcode contained in such Intel products. Intel
intends to appeal the second verdict, as well as ask the appellate court to
reinstate the original verdict. If AMD ultimately prevails in its position
that it has a license to use Intel's microcode in microprocessor and
peripheral products, AMD will be able to more easily develop and ship
imitations of certain Intel products, including Intel microprocessors.
Other companies have developed imitations of certain Intel products,
including members of the Intel386 and Intel486 microprocessor families.
Some of the companies are manufacturing these products through the use
of foundry services that have licenses with Intel. Intel had taken the
position that when a licensee provides licensed foundry services with
respect to a product which infringes an Intel patent, the developer's
infringing product is not immune from patent infringement claims. A Court of
Appeals for the Federal Circuit ruling in 1993 in favor of an imitator allows
unlicensed imitators to avoid patent infringement actions through affiliations
with certain licensed foundries. In January 1994, the U.S. Supreme Court
refused to review the lower court decision. In February 1994, the Company
settled certain related issues with Cyrix Corp. under which the Company
dismissed certain patent infringement claims and granted certain licenses.
Cyrix dismissed its antitrust claims against the Company.

The Company continues to believe that its Intel486 microprocessors will follow
a normal price maturity curve, but some distortion could occur if imitation
products enter the market in significant volume or alternative architectures
gain market acceptance. The Company expects to ship several million Pentium
processors in 1994, but to some extent such sales are dependent on peripheral
products supplied by other companies.

As a percentage of revenues, gross margin trended downward during 1993,
although the gross-margin contribution in dollars continued to grow. Factory
start-up costs and a broadening of the Company's manufacturing mix to include
more products such as flash memory and integrated systems adversely impacted
gross margin in percentage terms. Intel expects these margin trends to continue
in the near term.

Research and development and marketing spending is expected to remain at high
levels, as the Company regards these expenditures as critical to future
business success. Combined interest and other income and interest expense
should return to the $25-$30 million range per quarter, after the Ireland
expansion-related gains realized in the fourth quarter of 1993. As a result of
changes in the federal tax law, the Company expects a higher tax rate in 1994.

The Company recently updated certain technology exchange agreements with
International Business Machines Corp. (IBM). Under these agreements, IBM may
manufacture an increased portion of its requirements for the Intel486
microprocessor family. IBM has elected not to manufacture the Pentium processor
and future Intel processors. The Company believes that its relationship with
IBM remains good and that the agreements are beneficial to Intel's business in
the near term.

Intel's stock price is subject to significant volatility. If revenues or
earnings fail to meet expectations of the investment community, there could be
an immediate and significant impact on the trading price for the Company's
stock. Because of stock market forces beyond Intel's control and the nature of
Intel's business, such developments can be sudden.

The Company believes it has the product portfolio and financial and
technological resources necessary for continued success, but revenue and
profitability trends cannot be precisely determined at this time.

<PAGE> 18

FINANCIAL INFORMATION BY QUARTER

<TABLE>
<CAPTION>
(Unaudited)
- ----------------------------------------------------------------------------------------------
(In millions--except per share data)
1993 for Quarter Ended December 25 September 25 June 26 March 27
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net revenues............................ $2,389 $2,240 $2,130 $2,023
Cost of sales........................... $ 935 $ 833 $ 766 $ 718
Net income.............................. $ 594(C) $ 584 $ 569 $ 548
Earnings per share...................... $ 1.35 $ 1.33 $ 1.30 $ 1.24
Dividends per share (B)
Declared.............................. $ .05 $ .05 $ .05 $ .05
Paid................................ $ .05 $ .05 $ .05 $ .05
Market price range Common Stock (A)
High........................ $73.25 $68.75 $58.75 $59.94
Low......................... $56.25 $50.00 $43.69 $43.25
Market price range Step-Up Warrants (A)
High........................ $19.94 $17.63 $14.31 $14.69
Low......................... $13.75 $11.25 $ 9.44 $13.13
</TABLE>

<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------
(In millions--except per share data)
1992 for Quarter Ended December 26 September 26 June 27 March 28
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net revenues............................ $1,857 $1,426 $1,320 $1,241
Cost of sales........................... $ 725 $ 641 $ 610 $ 581
Net income.............................. $ 429 $ 241 $ 213 $ 184
Earnings per share...................... $ .99 $ .56 $ .50 $ .43
Dividends per share (B)
Declared.............................. $ .05 $ .05 $ -- $ --
Paid................................ $ .05 $ -- $ -- $ --
Market price range Common Stock (A)
High........................ $45.00 $33.31 $28.94 $34.25
Low......................... $31.25 $27.56 $23.50 $24.38
</TABLE>

(A) Intel's Common Stock (symbol INTC) and 1998 Step-Up Warrants (symbol
INTCW) are traded on NASDAQ and quoted in the Wall Street Journal and other
newspapers. Intel completed its public offering of the 1998 Step-Up Warrants in
March 1993. Intel's Common Stock also trades on the Zurich, Basel and Geneva,
Switzerland exchanges. At December 25, 1993 there were approximately 32,500
holders of Common Stock. All stock and warrant prices are closing prices per
the NASDAQ National Market System. Share, per share and warrant amounts have
been restated as necessary to reflect the 2-for-1 stock split effective May
1993.

(B) Intel declared its first quarterly dividend in the third quarter of 1992
and plans to continue the dividend payout program. However, future dividends
are dependent on future earnings, capital requirements and financial condition.

(C) Interest and other income for the fourth Quarter of 1993 includes gains of
$27 million from the sale of certain foreign benefits related to the Company's
Ireland expansion.

<PAGE> 1

EXHIBIT 21

INTEL CORPORATION

SUBSIDIARIES

(All 100% Owned)

Intel Electronics Ltd.
(Incorporated in Israel)

Intel International
(Incorporated in California)

Intel Ireland Ltd.
(Incorporated in Cayman Islands)

Intel Japan K.K.
(Incorporated in Japan)

Intel Overseas Corp.
(Incorporated in California)

Synchroquartz (U.S.) Corp.
(Incorporated in California)

<PAGE> 1

EXHIBIT 23

CONSENT OF ERNST & YOUNG, INDEPENDENT AUDITORS

We consent to the incorporation by reference in this Annual Report (Form
10-K) of Intel Corporation of our report dated January 17, 1994, included
in the 1993 Annual Report to Stockholders of Intel Corporation.

Our audits also include the financial statement schedules of Intel Corporation
listed in Item 14(a). These schedules are the responsibility of the Company's
management. Our responsibility is to express an opinion based on our audits.
In our opinion, the financial statement schedules referred to above, when
considered in relation to the basic financial statements taken as a whole,
present fairly in all material respects the information set forth therein.

We also consent to the incorporation by reference in the Registration Statements
(Form S-8 Nos. 33-10392, 2-73464, 2-56648, 33-33983, 2-90217, 2-63729,
33-29672, 2-58453, and 33-41771; and Form S-3 Nos. 2-97538, 33-11902, 33-20117,
33-54220, 33-58964, 33-49827, and 33-50971) of our report dated January 17,
1994, with respect to the financial statements incorporated herein by
reference, and our report included in the preceding paragraph with respect to
the financial statement schedules included in this Annual Report (Form 10-K) of
Intel Corporation

/s/Ernst & Young

San Jose, California
March 24, 1994