By the time when the Japanese DRAM manufacturers began to make DRAM chips that were both better and cheaper than those made by Intel, Intel has decided in 1985,

By the time when the Japanese DRAM manufacturers began to make DRAM chips that were both better and cheaper than those made by Intel, Intel has decided in 1985, probably rightly, that instead of investing a lot of money in trying to catch up with the Japanese they should better cut their losses by exiting the DRAM market and they should concentrate on what they were doing better, i.e. CPUs for IBM compatible PCs. This decision has been taken not much after the launch of the IBM PC/AT and also when Intel was preparing the launch of 80386, so they were pretty certain that they can make a lot of money from CPUs, even if they abandon their traditional market. It is likely that Intel has reached that point where such a decision had to be taken because for many years they must have underestimated the competence of the Japanese, by believing that they are not innovating, but only copying what the Americans do, exactly like now many Americans claim about the Chinese. When they have realized that actually the quality of the Japanese DRAMs is higher and their semiconductor plants have much better fabrication yields, it was too late.