By Tom Foremski for SiliconValleyWatcher

Intel, the world's largest semiconductor company, on Monday awarded massive public relations contracts to just three companies. It is part of a large rebranding effort set in motion by Intel CEO Paul Otellini, who was appointed just nine-months ago.

SVW sources close to Intel and within the PR industry said that Burson-Marsteller, Hill and Knowlton and Ogilvy Public Relations Worldwide were the winners of a long and highly competitive bidding process that engaged almost every large PR company.

"There were dozens of senior executives at all the large PR companies involved in trying to win this contract. Millions of dollars have been spent on winning this deal," said one source.

The plum contract is believed to be one of the largest ever awarded by a Silicon Valley company and quite possibly the largest within the tech industry.

The awards will consolidate Intel's use of dozens of external PR companies to just one main company in each of the following regions: North America, Europe and Asia. Burson-Marsteller won North Americas, Hill and Knowlton has the European contract and Ogilvy is responsible for Asia.

The Intel award was first expected in late November but Intel delayed the decision several times to carefully consider its strategic options.

The monetary value of the contracts is not known, but Intel is one of the largest and savviest marketing companies with a large checkbook. Its "Intel Inside" branding campaign is considered a text-book example of effective brand building. And it was under Mr Otellini's six year stretch as executive vice president of the Sales and Marketing Group that the Intel Inside marketing campaign helped make Intel into a household name rather than just an invisible component supplier to the PC industry.

Mr Otellini has already changed the logo of Intel, and is introducing new brands such as VIIV--its consumer electronics platform.

Although rival Advanced Micro Devices has won some market share against Intel in the server microprocessor market space, Intel is pouring massive resources into new product development that should stem any possible effects on its revenues.

Mr Otellini's challenge is how to make Intel relevant in a world where consolidation into ever larger general purpose chips and smaller chipsets, is being challenged by a divergence in consumer and computer digital products that are becoming more highly specialized.

Intel's approach has been to produce chips that are more general purpose and useful in a wide variety of products. But the divergence of products optimised for more focused applications, such as Apple Compter's iPod, is a market best served by less expensive but more specialist types of components.

Another challenge is Intel's communications chip business that continues to try to break into the cell phone and pocket computer markets. The cell phone industry has resisted Intel and Microsoft's attempts to establish strong footholds in these markets. Most probably because they fear the "PC-ization" of their industries. Intel and Microsoft profit margins are in the 60 percent plus range yet PC makers barely squeeze out profit margins in the sub-5 per cent range.

SVW will bring you more details as they emerge.

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Please see my recent top exec interview with Anand Chandrasekher

Intel's top sales guy, senior vp of worldwide sales and marketing:

A chat with Intel's top sales guy and one of the rising Silicon Valley stars: Anand Chandrasekher by ZDNet's Tom Foremski -- Anand Chandrasekher is on a roll at Intel following a very successful stint as head of Intel's Centrino Group--which has been a Golden Goose for the world's largest chipmaker