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Essay text:
Sales of system platforms, embedded control
products, and networking and communications products also grew.
Cost of sales increased by 40% from 1994 to 1995 and by 71% from 1993 to 1994.
The growth in cost of sales from 1993 to 1995 was driven by Pentium
microprocessor and board-level unit volume growth, new factories coming into
production, shifts in process and product mix, and in the fourth quarter of 1995,
by costs associated with unusually high reserves related to inventories of
certain purchased components. Gross margin for the fourth quarter of 1994
included the impact of a $475 million charge, primarily to cost of sales, to
cover replacement costs, replacement material and an inventory record related to
a divide problem in the floating point unit of the Pentium microprocessor...
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