Letter from Your Chairman


2020 was a time of crisis and renewal for Intel, marked by the global pandemic, economic disruption, calls for action on social equity, devastating wildfires, and intense competition. Intel employees met the challenges with extraordinary energy, demonstrating again the resilience of the culture. Thanks to their focus and diligence, Intel entered 2021 with a renewed sense of purpose as well as a position of financial and strategic strength.

Intel revenue for 2020, $77.9 billion, was the highest in the company’s history. The company generated $35.4 billion in cash from operations for the year and $21.1 billion in free cash flow. This brings cash from operations over the five years ending in 2020 to a total of $141.9 billion and free cash flow for this period to a total of $74.8 billion. Return on average equity for the year was 26.4%, bringing the five-year average to 22.8%. These results reflect the economic value of Intel’s technology, strategy, and execution.

In technology companies, value creation begins with technical innovation and the people who achieve it. When I joined the Board of Directors, I was impressed by the scope and depth of the technical talent at Intel. When I was an engineering student, I had read about the groundbreaking work of Intel’s founders and was inspired by how the technology they were developing was changing the world. Years later, my conversations with Intel employees give me confidence that the potential for silicon technology remains enormous.

To realize this potential, the Board of Directors works with management to review and approve business strategy, exploring opportunities and risks. We oversee the allocation of resources to execute the strategy and create value for the owners and the various stakeholders and communities that we serve. This process addresses investments in the company’s internal capabilities, opportunities in external investments, and the return of cash to owners.

Intel’s focus is to play a larger role in its customers’ success by delivering a predictable cadence of leadership products. Investments in central processing units, or CPUs, meet the needs of customers and keep the core business vibrant. Intel is also expanding its capabilities to provide multi-architectures, or xPUs, to meet the needs of a growing range of customers and applications in new markets. To ensure leadership, Intel continues to invest in differentiated technologies, such as artificial intelligence, advanced 5G networking technologies, and intelligent, autonomous edge computing. In 2020 Intel invested $13.6 billion in research and development.

Intel is one of the few semiconductor companies that relies primarily on the integration of design and manufacturing. Most of Intel’s products are designed by Intel’s engineers and produced in Intel’s manufacturing facilities. Intel will continue this integrated model to be able to provide new products with significant cost, power, and performance advantages. The technology and manufacturing organization, Intel's largest and once described by former CEO Andy Grove, as “the heart and soul of Intel”—is a vital part of the company’s culture.

Intel has visionary leadership who we are confident will take the company to new heights and set future directions of technology for Intel and the industry.

The largest portion of Intel’s capital investments in 2020 was directed to Intel’s factories and the highly sophisticated production equipment inside them. Total capital investment for the year was $14.3 billion. Since 2017 Intel has doubled wafer volume capacity in its 14nm and 10nm process technologies, and it is committed to delivering more advanced technology.

To complement its strategic objectives and strengthen its internal resources, Intel looks externally for potential acquisition opportunities. A key example in 2020 was Intel’s acquisition of Moovit, which accelerates the company's offering of Mobility as a Service, also known as MaaS, and brings Mobileye closer to achieving its plan to become a complete mobility provider, including robotaxi services. Intel completed various other acquisitions in 2020 to expand its product offerings and the markets it serves.

Intel also seeks to identify businesses that may no longer be an optimal strategic fit. As part of this process, in 2020 the company agreed to sell its NAND memory business to SK hynix for $9 billion US dollars. Intel has retained its Intel® Optane™ Technology, a memory technology built on a unique architecture that the company believes will be important in data center architectures. In 2020 Intel also divested the majority of its Home Gateway Platform division.

After reviewing the needs of the business, the Board addresses the return of cash to stockholders. Intel returned $19.8 billion in cash to its owners in 2020, representing 94% of free cash flow. This included $14.2 billion for stock repurchases to reduce the number of shares outstanding and $5.6 billion for cash dividends. During the five years ending in 2020, Intel repurchased stock for $44.7 billion and paid cash dividends of $26.7 billion.

Culture is critical to Intel’s success and human capital is an important aspect of Board oversight. Innovation flourishes when people feel free to offer different points of view, ask probing questions, and challenge conventional wisdom. To embrace change, this healthy skepticism must co-exist with optimism, which Intel founder Bob Noyce described as an “essential ingredient for innovation.” This is best achieved when people from varied personal and professional backgrounds believe they are valued and have opportunities to develop and grow. Intel is committed to continue to build a diverse, inclusive, and safe work environment to attract, develop, and retain the talent needed to remain at the forefront of innovation.

Integrity and fairness are the bedrock of Intel culture, including not only how we work with each other but also with owners, governments, supply chains, and communities. The Board established oversight for corporate responsibility in 2003. In 2020 we increased disclosure for Board processes of this oversight, including environment, sustainability, and governance, in the annual proxy statement.

The Board believes that with Pat Gelsinger, who became Intel’s eighth CEO in February 2021, Intel has visionary leadership that we are confident will take the company to new heights and set future directions of technology for Intel and the industry. As an Intel veteran of 30 years, Pat is steeped in Intel’s historic values, has a deep understanding of silicon technology, and will be a strong steward for our culture. Over the last ten years he has become an accomplished CEO who has been rated highly by external benchmarks. He returns with additional expertise in important adjacent markets and ecosystems for Intel, such as cloud infrastructure, enterprise mobility, and cybersecurity. The Board is also grateful to Bob Swan for his outstanding leadership and contributions. Under Bob’s leadership, Intel made significant progress in extending its reach in rapidly growing markets, maintaining financial and operating discipline, and enriching the culture.

Intel is committed to continue to build a diverse, inclusive, and safe work environment to attract, develop, and retain the talent needed to remain at the forefront of innovation.

Intel’s founders were motivated by the love of problem-solving, the possibilities of science, and their vision that silicon technology could make people’s lives better. That sense of purpose is very much alive at Intel today. Intel’s employees report that they are motivated by the knowledge that they are creating world-changing technology that enriches the lives of all people. On behalf of the Board, I extend our gratitude and admiration to Intel’s 110,600 employees for their determination and accomplishments.


Omar Ishrak
Chairman of the Board