WHERE THEY CAME FROM
In the crazy days of 1968, two of the tech age’s original rebels defected from their own company—Fairchild Semiconductor—to simply “work in silicon and do interesting things.” Already renowned in the industry, Gordon Moore, creator of Moore’s Law (whereby the number of transistors on a chip doubles every two years), and Bob Noyce, co-inventor of the integrated circuit, got a $2.5 million investment arranged by venture capitalist Arthur Rock, brought on Fairchild protégé Andy Grove to direct operations, and this dream team of the tech sector set out to produce the first semiconductor-based memory chips.

WHAT THEY DO
Intel’s microprocessors are the guts that make computers work and are inside most computers on the planet. The company is best known for its Pentium and Celeron microprocessors (about three-quarters of new P.C.’s have them).

WHAT THEY GOT RIGHT
Intel’s first microprocessor, built in 1971, spent most its first decade doing ho-hum tasks like timing traffic lights and cutting bacon into even strips. That changed in 1981 when I.B.M. selected Intel’s chip to run its first desktop P.C. Before long, Intel was producing tens of millions of microprocessors a year and soon abandoned the memory-chip market to focus exclusively on microprocessors. The move made Intel the primary hardware supplier to the P.C. industry and one of the most profitable businesses in the world. In 1997, Time magazine named Intel C.E.O. Andy Grove “Man of the Year.”

Though Intel was huge, it was invisible to consumers. Then, in 1990, marketing chief Dennis Carter hatched the “Intel Inside” consumer-marketing plan in which computers, as well as their advertising, would carry the Intel logo. The company instantly became one of most recognized brands in the world.

WHAT THEY GOT WRONG
Intel is still the market leader, but competitors, especially rival Advanced Micro Devices (A.M.D.), have been chipping away at market share. Management mistakes are partly to blame, including the haughty assumption that customers would pay higher prices for Intel’s chips. It also got on a cycle of missing delivery schedules, as with the Pentium 4 in 2000 and the Pentium M in 2004.

Intel has tried to diversify by moving into chips for cell phones, among other items, but it got out of these deals starting in 2005 when C.E.O. Paul Otellini reorganized the company, which led to the hiring of 10,000 new employees. That also proved to be a mistake, when Intel’s November 2006 stock market capitalization dropped to roughly one-quarter of its 2000 high of $424.6 billion.

Known for its cutthroat tactics, Intel is a target for antitrust litigation. The Federal Trade Commission began examining the company in the wake of three patent-infringement suits against it filed by computer makers Intergraph, Digital Equipment Corp., and Compaq Computer in 1998. In 2005, A.M.D. filed a historic antitrust suit against Intel, accusing it of illegally preserving its alleged monopoly on x86-based processors by exclusionary practices. The case, which will be tried in 2008, is said to be the most important antitrust case since U.S. v. Microsoft.

WHAT’S NEXT
Facing down the launch of archrival A.M.D.’s Barcelona chip in the summer of 2007, Intel is launching an aggressive mission to stay No 1. In the wake of falling profits in 2006, it slashed prices and cut 10,500 employees­—about 10 percent of its workforce—in May 2007. The radical restructuring was designed to save the company $2 billion in 2007 and $3 billion in 2008. It’s anticipated that Intel will try to streamline further by selling some of its communications and mobile-applications processor businesses.