The Interplay of Strategy and Finance at Intel (A): The Fab Location Decision

The Interplay of Strategy and Finance at Intel (A): The Fab Location Decision

By
Robert Burgelman, Philip Meza
2005|Case No.SM146A

This case describes the highly complex strategic and financial considerations Intel’s CEO must take into account in the decision of whether and where to build a state-of-the-art microprocessor factory (known as a “fab”). The case specifically examines a fab location decision made by Intel in 2002 where it faced mounting pressures and attractive subsidies to locate a state-of-the-art fab in Asia. Intel must balance purely financial considerations with strategic considerations, such as the impact of the location of a new fab on its existing network of plants as well as the geopolitical concerns of the governments of the United States, China and others. The case includes the voices of key decision makers at Intel including the CEO, CFO and head of manufacturing.

Learning Objective
This material is available for download by current Stanford GSB students, faculty, and staff, as well as Stanford GSB alumni. For inquiries, contact the Case Writing Office.

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