The audio chip is on the motherboard. It is not integrated with the Intel CPU like the current Intel HD Graphics are. I find that the Intel graphics are good enough, unless you are a hard core gamer.
The latest builds that I have done are with Asus motherboards that have a Realtec audio codec chip onboard.
The on-board audio works great for home theater or gaming.
The problem with DAW's, or audio production apps in general, is that they are optimized for low latency drivers such as ASIO. These are necessary for real-time monitoring, real-time effects, and virtual instruments. For example, hit a key on an external USB connected keyboard, and then wait for a soft-synth to make a sound. The Intel i7 is impressive, but the audio driver is the weak link in this scenario.
These ASIO drivers are not likely to be provided by the OEM or on-board audio chip manufacturer.
Currently, it seems that the preference for computer musicians is for an external USB2 sound module with ASIO drivers. There are various makes, models and prices to fit any budget.
So I would recommend these links for more info on this topic.
This is old, but still true:
http://www.soundonsound.c...rticles/pcmusician.htm More here:
http://tweakheadz.com/sou...-and-audio-interfaces/