The Intel Trinity

How Robert Noyce, Gordon Moore, and Andy Grove Built the World's Most Important Company

Michael S. Malone

• Publisher: Harper Business
• Year: 2014
• Print ISBN:
  9780062226761
• eBook ISBN:
  9780062226785
• Topic: Business
• Subtopic: Business Biographies
• Index: Business

Based on unprecedented access to the corporation's archives, The Intel Trinity is the first full history of Intel Corporation—the essential company of the digital age— told through the lives of the three most important figures in the company's history: Robert Noyce, Gordon Moore, and Andy Grove.

Often hailed the "most important company in the world," Intel remains, more than four decades after its inception, a defining company of the global digital economy. The legendary inventors of the microprocessor-the single most important product in the modern world-Intel today builds the tiny "engines" that power almost every intelligent electronic device on the planet.

But the true story of Intel is the human story of the trio of geniuses behind it. Michael S. Malone reveals how each brought different things to Intel, and at different times. Noyce, the most respected high tech figure of his generation, brought credibility (and money) to the company's founding; Moore made Intel the world's technological leader; and Grove, has relentlessly driven the company to ever-higher levels of success and competitiveness. Without any one of these figures, Intel would never have achieved its historic success; with them, Intel made possible the personal computer, Internet, telecommunications, and the personal electronics revolutions.

The Intel Trinity is not just the story of Intel's legendary past; it also offers an analysis of the formidable challenges that lie ahead as the company struggles to maintain its dominance, its culture, and its legacy.

With eight pages of black-and-white photos.

PART I: The Fairchildren (1957–1968)

CHAPTER 1

The Traitorous Eight

To understand Intel and the three men who led it, you must first understand Silicon Valley and its beginnings. To do that, you need to know the stories of Shockley Transistor, the Traitorous Eight, and Fairchild Semiconductor. Without that understanding, Intel Corporation will remain—as it does to most people—an enigma.

Silicon Valley began on a warm September morning in 1957 when seven key employees of Shockley Transistor of Mountain View, California, decided to quit their jobs and strike out on their own.

Whatever their fears, they were sure they were doing the right thing. Their boss, William Shockley, was one of the world’s greatest scientists; they had felt honored when he recruited them, and they certainly had been proud when he was awarded the Nobel Prize for Physics soon after they joined the company. But Shockley had proven a nightmare boss: mercurial, paranoid, arrogant, and dismissive. If he thought so little of them, if he distrusted them so much, why had he hired them? It was time to go. Now.

But the seven men weren’t sure about the disposition of the eighth and most important member of the team: Bob Noyce, their natural leader, a charismatic athlete and scientist who had quickly proven to also be a born businessman. He was the first among equals. Without him they were still quitting, but they weren’t sure they could succeed. Even as they pulled into the driveway of Noyce’s Los Altos home, the seven still weren’t sure he’d join them, and so they were greatly relieved when they saw Bob striding down his front walk to join them. He was in. Shockley Transistor was doomed. And in its place stood Fairchild Semiconductor, the home for many of them for the next decade.

The eight individuals, forever known by the epithet that Shockley gave them when they resigned—the Traitorous Eight—included Robert Noyce, Gordon Moore, Jay Last, Jean Hoerni, Victor Grinich, Eugene Kleiner, Sheldon Roberts, and Julius Blank. Between them, they represented what was probably the finest accumulation of young talent in solid-state physics anywhere in the world, including even the research groups of IBM and Motorola. Shockley, with his brutal hiring process, had made sure of that. Indeed, that hiring stands as his most valuable contribution to Silicon Valley. But none of these men knew anything about running a business. To their credit, they were smart enough to realize that fact.

It is sometimes forgotten that Fairchild was far from the first electronics company in the San Francisco Bay Area. In fact, even as the Eight walked out of Shockley’s company, that history was already more than a half century old. For much of the first half of the twentieth century, beginning with local boys experimenting with wireless radio in the teens to vacuum tube makers in the twenties to the brilliant students in the thirties, such as Bill Hewlett, Dave Packard, and Russ Varian, who lingered in town after finishing Fred Terman’s celebrated electronics program at Stanford University, the Valley had been a hotbed of electronics innovation and entrepreneurship. It awaited only a spark to ignite it into a full-fledged technology business community.

That spark was the Second World War. Suddenly, the little companies that had been struggling on commercial contracts found themselves buried in huge and lucrative government orders. At HP, Hewlett went to war, while Packard slept on a cot in his office and managed three shifts of women working around the clock. In the process, out of necessity, he learned to manage by establishing objectives and then entrusting his employees to meet those targets. When they did so, he gave them more responsibility . . . and to his amazement, the company not only ran itself, but did a better job than when he was directing it from the top down. He also found that these women workers were more productive when they were treated like members of a larger family—and that included giving them enough flexibility in their hours to let them deal with sick kids and other personal matters.

Other companies in the area made the same discoveries, and though none went so far as David Packard, most implemented personnel policies that were far more progressive than their East Coast counterparts.

The war also brought another, more sweeping, effect upon life in the Santa Clara Valley. More than a million young men passed through the Golden Gate on their way to fight in the Pacific. For many, their brief stay in San Francisco remained a treasured memory of good times and good weather before the long, often brutal years that followed. Moreover, during their tour of duty, many of these farm boys and store clerks were trained to deal with state-of-the-art aircraft and electronic instruments. They saw the future and wanted to be part of it. And as they made their way home after VJ Day, now armed with their GI Bill, many decided that their old civilian life was no longer enough. Instead, they would finish college quickly, get married, have babies, and head to California to take part in the next big Gold Rush—and not necessarily in that order.

By the end of the forties, driven by demand from a shattered Europe, a consumer explosion from the postwar wedding and baby booms (not to mention television), and renewed defense spending for the Cold War—the US economy was once again on fire and racing toward the greatest period of expansion in the nation’s history. The postwar migration to California had begun. Many of the migrants went in search of the thousands of new aerospace jobs in Southern California. But almost as many Midwesterners and Easterners headed instead for the San Francisco Bay Area—especially once the Lockheed brothers (from Los Gatos, but having made their riches in Burbank) identified the future of their industry in space and decided to tap into the area’s high level of scientific education. Soon Sunnyvale’s Lockheed Missile and Space division was the Valley’s largest employer. Other Eastern firms began to arrive: Sylvania, Philco, Ford Aeronutronics, and most important, IBM. Big Blue set up shop in San Jose intent on using local talent to develop a new form of magnetic memory storage: the disk drive.

The technology these companies and their scientist/engineer employees were building had evolved as well. Over the previous twenty years, since the founding of Terman’s lab, electronics had evolved from simple instruments designed to control and manage the flow of electricity in wires and vacuum tubes. The war had brought radar, microwave, and the first computers. Now a new revolution was about to hit—one that would not only lead them to redesign all of their existing products, but set them on the path to even greater inventions and riches.

This revolution began at Bell Labs in New York City. Just before the war, two scientists, John Bardeen and Walter Brattain, watched a lunchtime lecture about a singular new material. It looked like a small slab of silicon glass—a perfect insulator—so the attendees weren’t surprised when, after wires were attached to each end and current was introduced, . . . nothing happened. But then the demonstrator aimed a flashlight at the center of the slab—and their jaws dropped as the current suddenly passed through the wire. As the demonstrator explained, the silicon had been “doped” with an impurity, typically boron or phosphorus, that gave the material a unique property: when a second current was introduced at right angles to the original, a kind of chemical “gate” opened that allowed the original current through.

Profoundly impressed, Bardeen and Brattain made plans to investigate this new semiconductor as soon as their current research was done. But then history got in the way. It wasn’t until 1946 that the two men were again free to investigate semiconductors. They progressed quickly—until they ran into several technical snags. The two scientists were brilliant men (Bardeen would eventually become the only person to win two Nobel Prizes in physics, the second for explaining superconductivity), but now at an impasse, they decided to go down the hall to get some help from an even more brilliant physicist, William Shockley.

No doubt they went with considerable trepidation, because Shockley was notoriously arrogant and difficult. In the end, their hopes and fears were realized. Shockley did indeed solve their problems, but now the reputations of Bardeen and Brattain would be yoked with Shockley’s forever.

In light of its eventual fate, the device that the two scientists eventually fabricated—the transistor—was remarkably crude, almost Neolithic-looking in its first incarnation. It appeared to be a little metal arrowhead—with an unbent paper clip stuck on its back—plunged into the flat surface of a tiny irregular slab of burned glasslike germanium. But it worked, brilliantly. Even in this most primitive form, the transistor was faster, smaller, and consumed less power (and gave off much less heat) that the vacuum tubes it was designed to replace.

The transistor could be used in almost every application where vacuum tubes were the current standard—and in a whole lot of new applications, like portable radios and avionics. With all of that demand, a lot of people and companies quickly got very rich. And like many scientists before and since, Dr. William Shockley looked out from Bell Labs on all of this entrepreneurial and corporate fervor and asked: why are those people getting rich on my invention? As is always the case, there were other factors at work as well, including Shockley’s resentment that (rightly) Bardeen and Brattain were being given more credit by Bell Labs—and the world—for the transistor and his abrasive style, which, legend has it, had left him with nothing but enemies at the laboratory.

But it wasn’t all about Shockley’s personality. His genius was in play as well: having now studied solid-state technology for years, Shockley was convinced that germanium was a dead end, mostly because the requisite crystals could not be grown pure enough for higher levels of performance. Silicon, he had concluded, was the future of the transistor: not only could it be made purer but it was, after all, among the most common substances on earth.

So already scheming how to get rich and famous off his discovery, in 1953 Shockley took a leave of absence from Bell Labs and headed to California and a teaching position at his alma mater, Caltech. Within the year, Texas Instruments began making silicon transistors, both validating Shockley’s theory and further spurring him to go out on his own. Arnold Beckman of Beckman Instruments offered to back Shockley if he would work inside his company, but when Shockley’s mother got sick, he used the opportunity to convince Beckman to let him move north and join her in Palo Alto. There he set up shop as Shockley Transistor Laboratories and tried to recruit his old workmates at Bell Labs. When that failed—apparently no one in New Jersey ever wanted to work with him again—Shockley put out word that he was going to build the industry’s most advanced transistors . . . and that he was looking for the nation’s best and brightest young scientists to come help him change the world.

The tragedy of William Shockley is that, when he arrived in the Bay Area, he held everything in his hands to do just that. He had a mammoth reputation—one that was growing even greater as rumors spread that he might share the Nobel Prize. Thanks to that reputation, his call for top young talent was answered with a blizzard of job applications from which he chose—as history would show—eight young men of extraordinary talent, including two of world-historic importance. He had a technological vision (beginning with a revolutionary new “four-layer diode” transistor) that would eventually define a trillion-dollar industry—and the acumen to get there before anyone else. And he had picked a location to start his company that, once again, history would prove to be the most fertile for high-tech company creation on the planet.

And yet Shockley failed. And he failed so completely that, other than the residual notoriety of his outrageous views on race and intelligence, all that is really remembered of the man—once lauded as the greatest applied scientist since Newton—is his failure at Shockley Semiconductor.

What happened? The simple answer is that Shockley proved to be such a terrible boss—paranoid, contemptuous of his subordinates, and arrogant—that he drove away that same brilliant young talent that he had so successfully recruited just a few months before. All true. But there were a lot of bad and tyrannical bosses in 1950s America, and few ever faced a widespread mutiny in which the entire middle management walked out with no real job prospects. Bad as he was, it is hard to believe that Bill Shockley was the worst boss in America in 1956. So how did he become the bête noire of Silicon Valley history?

There are several answers to that.

The first is context. After HP survived the wrenching postwar lay-off, Hewlett and Packard (spurred in no little part by their wives) set out to find a new kind of management style that was more congruent with the casual, nonhierarchical style that characterized Northern California. Through the 1950s, they built upon the policies that the companies had first implemented during the war. Soon HP was famous for flexible hours, Friday beer busts, continuing-education programs with Stanford, twice daily coffee and doughnut breaks—and most important, employee profit sharing and stock options.

Even the physical nature of the company reflected this new kind of enlightenment. In his last great innovative contribution, Fred Terman, now provost at Stanford, set aside hundreds of acres of rolling pastureland adjoining the university to be leased by his old students and their companies. The result, the Stanford Industrial Park, was and still is the most beautiful and elegant of industrial parks—one of the wonders of the industrial world. Even Khrushchev and de Gaulle asked to see it on their visits to the United States. There, in their great, hill-hugging glass buildings, surrounded by this utopian vision of commercial work as paradise, and enjoying a work culture that had no equal in business history, HP-ers registered the highest levels of loyalty, morale, and creativity ever seen in the business world. And on weekends those employees could even camp and play in an entire valley, Little Basin, which HP had purchased for them in the mountains above Palo Alto.

Hewlett-Packard took this enlightened management further than any company in the Valley (indeed the world), but it wasn’t alone. A tour of the peninsula in the mid-1950s would have found one company after another—Varian, Litton, Sylvania, Philco, Lockheed—offering flattened organizational charts, greater trust in employees, recreation programs, and (at least for that buttoned-down era) more relaxed work environments. Just a mile from where Shockley would establish his company, on any spring afternoon, one could watch a Little League game at Mountain View’s Monte Loma School—where little Steve Jobs would soon play—featuring teams like Sylvania Electric competing against Ferry-Morse Seeds. There were vast picnics and other social events at Lockheed. And at NASA Ames, an early computer terminal was set up in the lobby of one of the buildings for the children of employees and their friends to use—like little Steve Wozniak. Here, in the thick of the Baby Boom, the best Valley companies understood the importance of family.

It was into this world that Shockley came—a man considered dysfunctional as a manager even in Murray Hill, New Jersey. And the young men he hired, most of them moving to California with families in tow, had only to look around and realize they had made a bad decision. Shockley would have been a miserable boss even in the Northeast, but on the San Francisco Peninsula, compared to what was going on around him, he seemed like the Bad Boss incarnate. As if to show how little he had in common with the enlightened business executives around him, he even eschewed the Stanford Industrial Park for a little cinderblock building between the railroad tracks and a shopping center on the Valley floor. If HP and its counterparts were reaching for the stars, Shockley’s grubby little storefront suggested that he was going to slug it out in the dirt.

Still, it took a little while for the frustration and anger of the new hires to reach a boiling point. Shockley (to Bardeen and Brattain’s dismay) did get to share the Nobe...

Table of contents

• Contents
• Introduction: Artifacts
• Part I: The Fairchildren (1957–1968)
• Part II: Start-Up (1968–1971)
• Part III: The Spirit of the Age (1972–1987)
• Part IV: The Most Important Company in the World (1988–1999)
• Part V: The Price of Success (2000–2014)
• Part VI: Aftermath
• Epilogue: Roaring at the Night
• Appendix: A Tutorial on Technology
• A Note on Sources
• Notes
• Index
• Photographic Insert
• About the Author
• Also by Michael S. Malone
• Credits
• Copyright
• About the Publisher