Business importance

Business importance

The first PC company to design and manufacture a PC based on the 386 was Compaq, rather than IBM, which had been dominant until that time. IBM was offered use of the processor, but relied instead on earlier processors to which it had manufacturing rights. The success of the Compaq 386 PC played an important role in legitimizing the PC "clone" industry, and to establishing Intel (and Microsoft) as central component suppliers to it.

Andy Grove, Intel's CEO at the time, made the decision not to encourage other manufacturers to produce the processor as second sources, a decision that was ultimately crucial to Intel's success in the market.[citation needed]. From a business perspective, the i386 was significant because it was the first significant microprocessor to be single-sourced – it was available only from Intel Corp (at least initially; IBM later became a second source). Prior to this, the difficulty of making chips and the uncertainty of reliable supply required that any mass-market semiconductor be multi-sourced, that is, made by two or more manufacturers, the second and subsequent ones manufacturing under license from the designer. Single-sourcing the i386 allowed Intel greater control over its development and substantially greater profits in later years. However, AMD introduced its compatible Am386 processor in March 1991 after overcoming legal obstacles, thus ending Intel's monopoly on 32-bit 386-compatible processors.