Hi, I'm Rob Walker. The semiconductor industry is the engine which has driven our Information Revolution, the computers, cell phones, satellites which has changed all our lives. And Fairchild semiconductor was the mother of the industry; Fairchild put the silicon in Silicon Valley . Founded in 1957 by eight scientists, it quickly reached heights of influence and prestige including the invention of the integrated circuit in 1959. Then beset by inept absentee management woes, it begin to hemorrhaging key people who founded new semiconductor companies like Intel, AMD, National LSI Logic and many others. Finally, in 1986 it was sold to National Semiconductor for just $122 million. Today, Fairchild Semiconductor has been reconstituted and is headquartered in bucolic Portland Maine , away from the craziness of Silicon Valley .
The Fairchild Chronicles is the story the 29 years of the west coast Company, both creative and chaotic, prolific and profane, told in the words of those who were there. It was a turbulent period representative of the sixties replete with alcohol, fistfights and aggressive behavior that most corporate histories don't discuss. During this period the number of transistors which could be put on a chip went from one to over 100,000. Today in 2004 that number has climbed to over 100 million.
The story is told in nine chapters. In ‘Intel starts” Gordon Moore tells of why he and Bob Noyce left to form Intel. In ‘Hogan's Heroes” Jerry Sanders tells of his remark that got him fired and on the track of becoming President of AMD. Fairchild invented semiconductor Design Automation, that story is told be Jim Downey and Jim Koford in “ASIC and CAD'. And in Schlumberger ‘Daze' we hear of the blunders which finally brought down the company.
What was Shockley like?
Well, he was an unusual fellow. First of all, he was extremely competitive and controversial. If there were two ways of stating things, one of which was controversial, and one of which was straightforward, he'd pick the controversial one every time. He just thrived on stimulating controversy. He had phenomenal physical intuition. One of my colleagues once said he thought Shockley could see electrons, he had such a good idea of what was going to happen. He was very competent in the solid state physics area, actually had been in other technical areas before that.
But he had some peculiar ideas on how to motivate people. This was the first time he really took on a major management responsibility. At Bell Laboratories, he had run a relatively small research group. But here he was trying to set up a new enterprise and some of his ideas, frankly, didn't work out too well for the success of that enterprise.
Did he do polygraph tests on people?
Well that was one of the things that happened. We had an incident in the laboratory where, actually a little pin point was left in one the doors and a lady cut her hand on it a bit. And Shockley decided that was malicious and started trying to track down who had put this point there in order to hurt this lady. And it got to the point where he was going start going through the whole staff with a polygraph test. He didn't get very far with that one however, we all kind of rebelled and that one died.
But there were so many incidents of what Shockley would do. In one instance we were all sitting in together listening to a lecture given by Tom Sah, C. T. Sah. Dr. Sah, who at that time knew more about MOS type structures, I believe, than anybody else in the world and related structures to that. And Sah was giving us a lecture on some of the device physics. Very much like what Andy Grove later, years later started to do with Fairchild. And Shockley walked in at 8:00 in the morning and wanted to know what everybody was doing in the meeting room when they should be out working. So he dismissed the class entirely. And he said by the way, what is Dr. Sah talking about? Well, he's talking about device physics. He said well stay. I'll finish the talk for him. And he did.
Arnold Beckman, the founder of Beckman Instruments, was the financing behind Shockley Semiconductor Laboratory, and Arnold came up to talk to us one time and after he was done Shockley stood up and made a few comments ending with, "If you're not happy with what were doing, I can take this someplace else." Which was completely uncalled for. Anyhow, we used that as a reason to actually call Beckman and say, "Hey, that's not true. If Shockley tried to move here, he'd have to go almost by himself."
And Beckman used that to say, "Well, I gather things aren't going completely right there. What can we do about it?" We agreed to have a dinner meeting with Beckman. In fact, we ended up having several dinner meetings. I would guess four, in retrospect, where Beckman came up from southern California and a group of us met with him to see what steps could be taken to improve the management situation at Shockley. The kind of thing we were looking at was something that put Shockley in a consulting position and brought in somebody who was an experienced general manager. Anyhow, on the last of these dinner meetings with Beckman, you now, we had previously been exploring such things as getting Shockley a professorship at Stanford but keeping him as a consultant. By that time, Shockley had won the Nobel Prize and it wasn't very difficult to find him a professorship someplace.
Anyhow, someone had gotten to Beckman... I have heard a rumor that it was someone from Bell Laboratories... and told Beckman that if he made this move, it would just ruin Shockley's career. So Beckman's attitude toward us changed and he essentially said, "Hey, Shockley's the boss, you guys like it or... whatever." At that time we felt we felt we had burned our bridges so badly that there was no way we could stick around working for Shockley, after having gone around him to try to straighten out this problem.
So, one of the group that had been meeting with Beckman, by the name of Gene Kleiner, had a friend who worked at Hayden Stone, the investment banking firm, in New York at that time. And it said, essentially, "there's a group of us who like working together, we're all going to leave Shockley, do you think there's a company that would like to hire the group?" The response was: "Well, wait a minute," and one of the senior partners, by the name of Bud Coyle, and a young Harvard MBA by the name of Arthur Rock, came to California to meet with the group.
Shockley was able to recruit almost anyone he wanted because of his Nobel Prize and he was considered quite an intellect and he can, he was able to get a lot of these young scientists to go to work for him at Shockley Laboratory Division of Beckman Instruments. And after they were there a couple of years, they became fairly disappointed with Shockley and, and Eugene Kleiner was one of the seven who had banded together and thought that they would like to quit Shockley and maybe get jobs together because there was no such thing in those days as forming a company and, what with the amount of capital that they needed to enter the semiconductor business. And so, and to get financing for the company through some, through one of the larger companies. And so we agreed to do that, the seven of us, and then Bob Noyce decided he would join, and then became eight and then, of course, Shockley labeled us, labeled them the "Treacherous Eight". So we went through all the likely suspects and we had gone through
thirty-five of them. And these were companies, now this was 1957, and there were a number of companies who were trying to get into more technology and, they had expressed interest to us previously that they would like to get into more technology, would we bring them anything in technology we saw. But when we told them that the deal was that they would set up, lend us money and set up a separate company and back it, they said no, they couldn't do that because they didn't, they thought it would upset their organizations. So at just about that time we were willing, we were about ready to give up. When through a third person, we met Sherman Fairchild. children and Sherman Fairchild's father only had the one child. So he had plenty of money and he was an inventor and he had invented the aerial camera and, and the airplane to carry the camera. And so they, he set up two separate companies, Fairchild Airplane and Fairchild Camera and Instrument Corporation, and he decided that he would have Fairchild Camera and Instrument put up the million and a half dollars that we felt we needed in return for which they got an option to buy all of our stock. And the stock was divided ten percent for each of the eight and twenty percent for Hayden Stone. .
The senior group at Shockley Labs had approached many companies and they had been turned down and somehow you didn't turn them down. What was the reason for that?
Well, I think the larger companies; they all thought they knew more than the group did. I mean the GE's and the Westinghouse's and companies like who were in the component business, tube business, and this would just have been an adjunct - Western Electric, they had all the answers at Bell Labs. We at Fairchild were looking for an opportunity and recognized the talent that was there - just if you looked at the pedigrees, at least the top four of five of them from a technical point of view. And I had some years before been able to attend one of the Bell Labs seminars on the early transistor and was intrigued on what this could do. You know, I saw a television set that was run completely with transistors in the early 50's and this seemed to me an opportunity for Fairchild to get into a new business without any pre-conceived ideas as to how to run it or how to go about it.
And there was no internal group doing that?
No, none at all.
So that probably made the difference.
And I think it's interesting to note that every one of these major companies has never made a success - from RCA, Westinghouse, GE, in the semiconductor business.
The company was really in the right place at the right time. In the first place, we pursued this idea of a diffused silicon transistor that Shockley had been initially going to do. It was something that had been made in the laboratory at Bell Labs but was not a commercial device at all. We were the first ones to bring to the market what's known as a "mesa" transistor and it was a silicon mesa transistor at that time. It was quite a successful device on the scale that we were working at least, but that was only the first of several devices.
That was the first silicon transistor that was built by the batch process where you made a lot of them on a wafer and then cut them up individually. And it was the first device in manufacturing that used photolithography to produce the structures.
Speaking of lithography reminds me that when Fairchild started, we split the major processes that had to be developed among the participants there and Bob Noyce had responsibility for setting up the lithography capability. He went to San Francisco to a large camera store and dug through their supply of 35mm movie camera lenses excuse me,16mm movie camera lenses and picked out the three that were best matched in so far as focal length was concerned. And those were the optics in the step and repeat cameras we built to make the first transistor structures.
In other words, there was no... you had to build everything in those days... there was no industry that built this...
That's right. We were the first ones getting into that technology. I had responsibility for the fusion furnaces for example. I'd built furnaces previously, so we designed furnaces and actually, one of the very first spin offs to start a new company out of Fairchild was a result of that. Art Lash was my technician... we had him doing a few things but initially he was working with some of the assembly operations and we had to make little glass capillary tubes... to bond the gold wires onto the transistors. We had a scheme where the gold wire was fed through the capillary and then you heated it with a flame so it made a ball on the end and then you pushed down the capillary and it would stick to metal. Anyhow, those tended to get plugged so we needed a lot of capillaries, so we encouraged Art to go into business nights and evenings making capillaries to sell to Fairchild. and then he was helping me also with the furnaces we were designing and those two products were the basis of the formation of Electroglass Corporation. Art finally made that a full time job rather than continuing to work at Fairchild. A lot of the infrastructure companies developed more or less like that during those early days.
Anyhow, while we were making these first mesa transistors, completing development of the process and putting them into production, we had a person whose background was as a theoretician, as part of the original group, by the name of John Hoerni. And, particularly when we setting up the initial equipment, John was writing in his notebook and coming up with ideas of things to try, and he came up with a proposal... of instead of making a "mesa," which exposes the sensitive area of the transistor to the outside world, that one should just do more of these diffusions oxide mask diffusions and leave the oxide over the top of the junction, the sensitive part. Well, that was something that previously had been considered a bad idea because Bell Labs' conventional wisdom was that the oxide was dirty and you wanted to get rid of it.
But we couldn't try John's idea right away because it took four index masking operations in order to make the structure he was proposing and Bob Noyce only bought three lenses! So we couldn't make enough masks in order to make the full structure at first. So, the idea lay dormant for well over year approaching two years before we could get it to the point where we could actually try it. And when we did, it turned out to work beautifully. This protected the transistors in the regions where they were really sensitive and that was a major step forward that came out of Fairchild. In fact, when I look at the development of the integrated circuit, I always measure it from the first planar transistor rather than from the first integrated circuit.
Well, IC's today are built the same way, are they not? With an oxide layer?
That's right. Yeah, it's very much the same technology today. Now, when the patents for the planar transistor were being filed, Noyce was working with the patent attorney and the patent attorney suggested: "Now, have you looked at all the ramifications of this technology?" And Bob, who was director of research and development at Fairchild at that time went back... actually had a meeting of the senior staff there and during that meeting, he invented the two things that were needed to go from the planar transistor to an integrated circuit: the idea of using thin, film interconnections over the top of the silicon oxide, and the idea of using extra junctions in order to isolate one transistor from another. And he came up with both of those during the same meeting. So, fortunately, we were really in the right path of the technology to do these things. Texas Instruments... Jack Kilby at Texas Instruments, had already built an integrated circuit but his was very much a laboratory device that was... had etched thin areas to make resistors, it had flying wire bonds that weren't really practical for anything like a production device. But the technology we had at Fairchild was the path to make the practical integrated circuit.
Noyce and Kilby are often given credit as co- inventors of the integrated circuit but what they contributed was dramatically different: Kilby made a laboratory model by hook and crook, Noyce took the planar technology and extended it so you could make a complete structure using the material processing operations we had developed. So you could cover a whole wafer with identical structures again and cut them apart and package them individually.
Which again, is what is done today.
Absolutely, this was the step along that path. So Fairchild really got a lot of that going.
Well, at some point in time, you took over R&D and you built the facility at Palo Alto .
Yeah, well that's another story. To digress a bit, when we set up Fairchild the first thing we knew was that none of us had any experience at all in running a company. And we'd seen how difficult that was at Shockley. So, we set out to hire our own boss. The eight of us went looking rather broadly for a general manager to come in and run the company. We advertised in the Wall Street Journal, looked around, and we found a fellow by the name of Ed Baldwin from Hughes Semiconductor. He'd been engineering manager at Hughes and he knew a lot of things about operating an enterprise that we didn't. So we hired Ed as our boss.
Ed never really felt Fairchild was his company. I still don't understand why he came in very early he had the same equity participation that the eight of the founders did... or at least he had access to it... in fact, he never put in his $500 and never got it. But about a year after he arrived and after we'd put the first products into production, he and several of the people he had brought in announced one morning they were leaving and they went down the street and set up Rheem Semiconductor. That was the time I became director of R&D. Until that time, I had had a position responsible for engineering the new processes and products and putting them into production and the quality organization, and Bob Noyce had a parallel position running Research and Development.
When Ed left the eight of us sat down to discuss what we should do. Should we go out and look for someone else? And we decided that after being betrayed by the first guy we brought in that we should risk the fact that none of us knew much about running a business, although we knew now that we had known a year previously. And we decided that Bob should become the general manager. Then I moved over and took the research and development responsibility, and I had that at Fairchild until I left in 1968.
Under your leadership, there was a tremendous amount of developments made.
Well, Fairchild had the right technology at the time and as a result, I think, we were the most productive laboratory in the business for about a decade there at least. The integrated circuit developments principally came out of there, we made more and more complex circuits, extended the capability to linear circuits as well as to digital circuits, we did the basic work on making stable MOS devices. Some parallel work was done at RCA laboratories but most of it really came from Fairchild R & D.
One thing we did that I don't think it's generally recognized, is the first CMOS circuits were made there. In fact, I remember this because my first trip to Europe in 1963 was to describe the advantages of CMOS circuitry for low power electronics. I went to several European countries with a group headed by Ed Keanjan, that was under some kind of NATO sponsorship... there's a book on micropower electronics that came out of that.
And there had been a tremendous number of variations on the technology since. But Fairchild really was in the right place at the right time. Not only did we have a lot of technical contributions, that was a time period where it seems like every new idea that came along spawned one to five new companies. It really was the period of time when the "silicon valley effect" of all the spin offs really blossomed. There's a genealogy chart that Don Hefler published in a couple of editions that shows a lot of the companies that ... can trace their origin back to Fairchild.
Yeah, lots. Now when did you come up with " Moore 's Law?"
Moore 's Law has been applied to ... one graph in an article I published in 1965. Electronics magazine's 35th anniversary edition asked me to predict the course of component technology for the next ten years and I looked at what we had done in integrated circuits. Integrated circuits then were about four years old. We had just gotten some of the first families out, making some a bit more complex, and I looked at what was happening on those and saw that the number of components that is the number of transistors or resistors in an integrated circuit was about doubling every year. So I just took that and said "What's gonna happen in components is going to continue to happen for the next ten years, so things will be a thousand times as complex in 1975 as they were in 1965."And I think the most complex circuit we had around was 64 components when I did this so I was predicting 64,000 components in an integrated circuit by the mid 70s. And amazingly enough, we stayed almost exactly on that curve for ten years.
Did Carver Mead have anything to do with that, with his scaling work?
Ah, no, it was completely independent of... we've talked... I certainly have talked with Carver off and on but he wasn't involved at all in that prediction.
Now, I modified that in 1975, suggesting it was going to slow down to more like a doubling every two years and I was a little bit too pessimistic then we've actually beat that. It doubles something between 18 months and two years.
Yes, and when will it approach the number of atoms in the universe?
I haven't extrapolated it that far. That's one thing: any exponential like that predicts a disaster if you extrapolate it far enough.
Ah, one of the questions that has come out of a number of lawsuits as of recently, that here on the west coast, in silicon valley, we didn't patent circuit designs or Computer Aided Design for that matter. And as a result, we never patented at Fairchild the ROM and the RAM. Intel never patented the microprocessor... and others did. East coast companies or TI in particular, took our work and patented it. How come we never recognized the importance of that... circuit development?
Well, it was probably a different attitude about patents. One thing that happened in the semiconductor industry... semiconductor processes are a long series of steps and the patents had gotten pretty broadly spread because all of the people working on the technology had some of them. And the net result was in order for any of us to operate we had to be cross licensed so the participants tended to all cross, license one another. So, there was not a tremendous advantage to having more patents... with a couple of exceptions, there wasn't much net benefit from it.
What we never anticipated, I guess, was a lot of other participants were going to enter the business later on. So, at Fairchild we tended to patent relatively few things, typically the ones that we thought we could police most easily and were the most difficult to get around, you know, the more fundamental things. But, I was responsible for a lot of those decisions. I remember one in particular that, in retrospect, is kind of funny. In the early days of the integrated circuit, Bob Norman, one of the people who were involved there, suggested the idea of semiconductor memory... the whole idea of how semiconductorflip- flops could be used as a memory structure, and I decided it was so economically ridiculous, it didn't make any sense to file a patent on it.
You recognize that a few years later, semiconductor memory was the basis of...
And I decided then when they finally made that decision that I was going to change jobs, and I bought a New York Times on the way home, and in the New York Times was an ad for a production manager for this company called Fairchild in August of 1959.
When I had answered this ad they called me down to an interview in New York City, and it was a hot, hot day in August, and the interview room was a hotel room, and I get up there and I'm perspiring, you know, because it's hotter than hell, and I walk in and there are these two guys sitting around this table with all sorts of alcohol, you know, stacked up, and these guys were in great shape, you know. It was around eleven o'clock in the morning and one was the HR VP and the other was the VP of Manufacturing, and we interviewed and I hit it off with these guys and we went to lunch and had they, you know, got further bombed, and they gave me a job offer. For thirteen thousand dollars, I was making seventy-two hundred dollars a year. They offered me thirteen thousand. I accepted on the spot. That weekend I went home, told me wife. She was amazed that I'd want to leave the East Coast but we sold the house, packed up the kids and drove to California . When I got out here and came to Fairchild at Whisman Road facility they didn't know me from Adam. They'd lost track of the fact that they'd offered me a job. And it was some time before I finally got a hold of Grady and went over with him, you know, just exactly what happened, what have you, when they finally recognized that, yeah, they had given me a job offer.
So they put me on the payroll and they put me in a room along with the other guy that they'd hired for the same job. Now can you picture this? Two production managers in the same office with one general foreman who is this guy, Bob Robson that I had mentioned earlier, I mean just complete chaos. There was no understanding of how to manage a manufacturing organization, well, any kind of an organization. And that's a weakness and a positive to, many ways probably one of the reasons why the organizations were so flexible because they didn't have structure. But from a guy from GE who had been there at GE for nine years it was a hell of a shock
Well, the founders were all scientists, were they not at Fairchild?
Almost all of them. Julie Blank wasn't and Gene Kleiner weren't. Gene Kleiner was a machinist, probably more than a machinist, he was a very high-class machinist because he could teach mathematics and teach machine design. And actually Julie was an engineer but did not work as a scientist. He was an engineer. He worked more in the plant engineering kinds of functions. But the rest of them were. You're right, the operation was run by people who were, you know, scientists; Gordon and Jay Last and Bob Noyce, etc.
So how was this resolved?
I was only there a couple of weeks and the other guy disappeared, and I think he just got disgusted and quit. I didn't have any choice. I'd sold, I cut the limb off, you know, behind me so I had to stick it out. Actually, it was very fortunate I did.
So were you really one of the first of the semiconductor manufacturing people?
Yeah. The rest of the, when you looked at, first of all, Fairchild was the first, we're talking about Silicon Valley here before it was called Silicon Valley . If you talk about that area, Fairchild certainly was the first semiconductor facility went into manufacturing at all because Shockley was the only operation prior to that and they never really got to a manufacturing mode.
The other thing about that and many ways was very fortunate for me, there was nobody in the operation who had manufacturing experience, or if they did they had manufacturing experience in California in sort of a military kinds of environments. So I think I was very fortunate to arrive at the scene when the company needed manufacturing capability, and there was no one else around who really had extensive manufacturing background.
And there was no semiconductor equipment sector in those days.
Oh yeah, everything was being made, you know, especially, you know, for silicon diffused junction devices. There was equipment, you know, fairly sophisticated equipment being used at various other types of products in the East Coast, like at Philco or maybe even at Motorola and at TI, at Transitron or what have you, all these companies. But for the product that Fairchild was building was, you know, you had to go out and buy a laboratory diffusion furnace and modify it. You had to build your own
pullers, you know, for the ingot puller and all the step-and-repeat, you know Bob Noyce built his own step-and-repeat camera, the first one that they used. There was, one of the geniuses of these people is that, yeah, they were scientists, they were Doctors in Physics, what have you, but God they could get down at the basic level and build stuff and do it, you know, fast.
There's this great story that Tom Bay tells, you know, Tom Bay was the first marketing manager at Fairchild. And he joined about three or four months after they started, after they'd broken away from Shockley and was starting to set up shop, and he had read in one of the aerospace magazines that the IBM Owego, which was, you know, a military branch of IBM at the time, but they were looking for a core driver. They had gotten the contract to convert the B-52 electronic system; I can't remember exactly what the defense system was, from vacuum tubes to solid state. They had gotten the contract to do this. And they were looking for this core driver. And he and Bob went back to visit IBM and they at IBM described, you know, what they needed. It was very important for them to meet the military temperature issues, which was a problem for what they were using because they were using either germanium or attempting germanium in one of the TI devices, and they needed certain speed and what have you. So Bob said, "We can do that." Now you understand they hadn't designed the first transistor yet. And he didn't really know, except he did know. I mean he had this gut feeling of what they could do and what they couldn't do. So, they said "We'll do it," and they took a contract. The first contract Fairchild got was for a hundred and fifty bucks for, I don't know, three hundred of these or some damn thing.
And just before they left Bob turned to the purchasing guy and he said, "Before we leave, which do you want? Do you want NPN or PNP?" And IBM, you know, said, "Doesn't matter to us. We'll leave it with you. You tell us what it's going to be and we'll live with that." So they left.
And that meeting occurred in October of, oh God now, it had to be '57, and they were supposed to deliver shortly after the, you know, first of the year. And they didn't have a plant yet. I mean they had a building but they didn't have... They came out and Tom says, I mean they were still sweeping the floor. They went ahead and they built furnaces, they built a puller, they put the assembly equipment in, Vick Grinich did their test, you know, how they were going to test this stuff, and they went down two parallel paths, NPN up to PNP. Gordon Moore was assigned NPN and Jean Hoerni to PNP. And they worked like hell, and it turns out that the PNP, as you know, is much more difficult product, especially in those days to build and John had run into a lot of yield problems and the NPN came through. But they delivered the hundred units in March starting from scratch.scratch in design and scratch at factory. And it's the only reason they were able to do that is, of course, everything, the equipment was very rudimentary but also these guys were just very good in all ways.
In a way it's kind of a model of a modern start-up where, you know, Internet speed...
: ...because industry wasn't that way. American industry was no that way, it's not...
No, but that's what it took. That's why there were damn few, if any, of the conventional classic whole-line companies who ever made it in the semiconductor business. I mean all these guys were in it, GE and so on, but they never made it, never were successful. But a very interesting guy, you know, it's easy to talk about Gordon and then about, Gordon too, but then Bob Noyce, the interesting thing about Bob, we were very close family wise, and he'd come down, you know, on Sunday afternoon with his family and we'd barbecue, what have you. And this one weekend I had started building a barbecue pit with a deal that would be, the grate could be raised and lowered with a crank, you know, and what have you. And I got involved in building the thing and I ran into an impasse and I couldn't see how I was going to, you know, build my barbecue pit, it was made of bricks, properly to get to the stage I wanted to get to. And he says, "Just a few minutes. I'm going to go back and get my mortar equipment." And he goes back up and brings his tools down and, you know, he goes to work like a mason. And, yeah, he solved that problem and finished the barbecue that weekend, and that was Bob Noyce, just unbelievable talent in any direction you want to look at, interesting people, all of them.
And a nice guy, too.
Oh, he was a charmer, a real charmer. He was a charmer for the ladies, too, you know. Unlike a lot of us who would love to be, he was.
Well anyway, so what happened at Fairchild? Did you build up the capacity and the production?
Yeah. I joined in October of '59, and we had very little volume at that time, so everything had to do with increasing volume and increasing yields. Yields were terrible.,. Probably, the thing that allowed us to really go to big volume and solve the yield problems and eliminate this kind of step was the invention of the planar process. And you know, I always felt that the reason Jean Hoerni came up with that is because he had been unsuccessful at the effort, and sort of in competition with Gordon on the NPN, or the PNP effort that the company did not pick that to be the first chip. And it bothered Jean, and Jean was one of these very emotional characters, tremendously talented but very emotional, too. And he worked very hard at continuing to push the PNP but also in terms of eliminating the reasons why he was getting a lousy yield, which, you know, ultimately you're drove in the direction of somehow protecting that junction; which is what the planar process does is to protect the junction. But once the planar process was developed, boy, yields just skyrocketed and, of course as you know, it allowed all sorts of great things to happen in the industry, like integrated circuits.
Right. I think you talked about production, there's another interesting issue that developed that had a major impact upon the industry, you know, across the world is that after we started, still at the transistor level, but we were using planar devices, we were producing significant numbers of them but we were running into limitations as to where we could sell the product. The problem really was that the bulk of our product was going in the military, and to a much lesser extent to computer business. But there was this vast consumer market out there and the bulk of the computer market. But we didn't have prices low enough to participate there, really because of our assembly cost. As you realize, you know, you're building one at a time transistors. And these things were not heavily automated year to year at the time. And we looked at this issue. Labor costs was the predominant item, for our cost of building transistors. And the availability and the cost in the Bay Area was a problem. So first we started looking, I started looking elsewhere in the country, that's why we located a plant in Portland , Maine , but that didn't really solve the problem. So one of the guys had been traveling around the world and he happened to have stopped in Hong Kong . And Bob and I; Noyce had an investment in a radio company in Hong Kong . This was like 1962, a failing radio Company, it was and this guy came back and he says, "You know, we got to look at Hong Kong ."
So I, and Julie Blank went over to Hong Kong and we became convinced that, by God we could assemble these devices here especially now that we had planar chips, which excused a lot of problems, planar chips did. So we set up a factory there and that's where that all started. It's, you know, it was originally driven by labor cost, and then secondly, it turns out, overhead costs. It's just that it was a mad rush into Southeast Asia by all companies eventually.
Well, did you also go to Shiprock , New Mexico to the Indian reservation?
Yeah, that's not one of the...
I noticed you didn't bring that up.
No, we did, that was at the, just about the time we went to Portland , Maine . We looked elsewhere in Shiprock, looked like a possibility and we did locate down there. It never worked out, though we were really screwing up the whole societal structure at the Indian tribe. You know, the women were making money and the guys were drinking it up and it was a failure.
Well now, you developed the silicon gate, the first
Usable silicon gate process.
That's correct. Yeah, that was the first project. In fact, when I joined the lab, I was given the choice of two things to do. One was a circuit design, a shift register using metal-gate technology. I think it was a hundred or two-hundred bit shift register. And the other alternative that I had was to develop a process technology using polysilicon as the gate electrode of the transistors. And I recognized immediately the advantages of using polysilicon and I decided... I picked that one, even if my heart was leaning more and more, even in those days, toward design.
And so, so I picked that and Tom Klein had done some prior work to show that, in fact, the work function between the polysilicon and silicon would work out in such a way that the threshold voltage would be lower, which was a big advantage in those days because we could not control Qss as well as we can today. But there was there was no way of doing it... in fact, even etching polysilicon... it was not understood how to do it. And so I started from scratch. I started from the basic idea that how, you know, how could one make an integrated circuit using polysilicon. I developed the basic architectural process. I started doing the... I developed the etching solution for etching reliably polysilicon and, using some existing test patterns that were there, showed that, in fact, we could produce workable transistors within a few months... then we started it.
I also invented the buried... what is called the buried contact, which is the polysilicon to silicon contact which was, in fact, later on was the one that allowed us to make the microprocessor so quickly, so soon. Because it would allow to have much more dense circuitry than was possible with metal gate. So, by April we had the basic process technology worked out and then I designed the first integrated circuit to use the silicon gate technology, which was the 3708. It was an 8-bit analog multiplexer using decoding logic. It was housed in a 16-pin package and it was a product that was particularly difficult to do in manufacturing. There was already a product called the 3705, it was in the catalog of products of Fairchild. It was sold mostly to military applications.
And because the "on" resistance of these transistors had to be very low, they had to be fast, and the leakage had to be extremely low. It was very difficult to make and so we picked that device as a test bed for the technology and eventually, in `69, we were in production with that in the lab so that became the first, the first commercial silicon-gate technology product.
Well I had no interest in leaving Motorola for a company named Fairchild in Northern California . But I agreed to an interview on a proviso that it could be over a weekend. And my plan quite simply was to spend a weekend in California after a brief interview. Well, you know, sometimes reality mugs you. I got out there, and I was frankly blown away by the caliber of the people, just some incredibly great people. The sales manager was a guy named Don Rogers, marketing manager was a guy named Tom Bay . These guys were super smart guys, and they introduced me to another feisty little guy who was running a diode operation called John Reddy, who you know just couldn't tell me enough about how great this company was. And he didn't have to tell me, I was a smart guy, I figured it out.
And then I met Bob Noyce and my world changed. This was the smartest man I'd ever met in my life. He was congenial. He was engaging. He was just so smart and we talked about the things they were doing and I thought to myself gosh, I just really have to go to work for this company. So that was the end of my playing around in California for the weekend, instead I went into my mode of how do I get a job with these guys, where I wanted to be. So what they really wanted me to do was be a Sales Engineer in the Chicago area basically calling on the same customers where I had been so effective for
their competitor. And they were quite blown away when I said, well, I'll accept the job, but it's got to be in Southern California . And again, I said this is the place I want to live and didn't think a lot more about it.
But once I got to...Anyway, I got the job, I left Motorola, this was in early '61, and my life has just been incredibly great since then. From '61 through '68, I was just thrilled with what was going on in our industry. We were changing the world. Fairchild had invented the silicon planar transistor. They had invented the monolithic integrated circuit. Bob Noyce was there for any bright young employee to talk to. The rest of the team was motivated highly to be number one in the industry and it was just a wonderful period of time as we were inventing new things, opening new markets. I remember there was a guy named Newton Minnow, who was at the time the head of the FCC and he mandated that all TV sets had to have UHF. Well this was a big deal back in those days, in the '60 up to that there was only a few channels; 1 through 13 and half of those were just static. All of a sudden you had to have UHF, so every TV had to have a UHF tuner. Well to have a UHF tuner you need a very high frequency oscillator. Well, Fairchild had a transistor, the 1211. How's that? 1211, the 2N1211 and it was a dynamite transistor. And so from that technology, we went out, we were going to go sell these things against an RCA New Vista. RCA New Vista was a solid-state device, sort of, but it still had a cathode. And so it had a lifetime, a limited lifetime as opposed to a transistor, which in theory was infinitely, had an infinite lifetime. So I went out there, only problem was that this device we were selling, and I said it was the 2N1211, that's a mistake, it was the 2N918; 1211 was the internal technology number. So the 2N918 sold for 150 dollars. Well, since they were looking for a product for about a buck, for this device, that was kind of a setback for us. But I had this great conversation with Bob Noyce and Tom Bay at Bob Noyce's house. And of course by this time, you know, Bob was already a wealthy and successful fellow in a beautiful home. And we met on a weekend and offered me a beer and I never drank beer, didn't want to drink because I didn't want it to cloud my mind. And we started talking about this and I said, you know, I think we can sell this product, but you know they can only afford to spend less than 2 dollars, you know. And we have to see a way to get down below a dollar.
So Bob proceeded to tell me about what they were doing about shrinking the technology and of course we've learned since then that that's what's the magic of semiconductors, you just keep building smaller and smaller feature sizes, driving the cost down. And he said, let's just do it. We're going to open a plant in Hong Kong and we're going to put these things in plastic and they'll be cheap and we can just do it. Well, I was blown away and I went out there in my role as-and my title was a great title at the time, Director of Entertainment Sales. Sound like I was selling booking agents or something, but I was actually calling on consumer customers, TV, radio, stereo as Fairchild was moving from being in the, primarily, in the military electronic supply chain to consumer and industrial. I guess the point I like to make with that was it just showed that there was nothing we couldn't do. You know later on, you know Thomas Wolf wrote about Masters of the Universe, but he didn't have it right. The Masters of the Universe weren't the guys who were selling stocks and bonds on Wall Street. We were the Masters of the Universe. We were changing the World. Semiconductor technology would let you do things you could never do before and make them available everywhere. So it wasn't very long, of course today, I mean, nobody even thinks anything about, you know, UHF channels. Now we got 600 cable channels or satellite channels, but it all started, you know, with an innovative company, Fairchild Semiconductor with new technology and a marketing drive to change the world. And it was a wonderful place to work, but it had a character flaw. And the character flaw was called Syosset, Long Island . And that's where Fairchild Camera and Instrument was headquartered and they were the owner of Fairchild Semiconductor. And all the cash flow and all the money that was being made was flowing into their pockets and being dissipated on not such great other activities. Meanwhile the contributors at Fairchild weren't making very much money particularly but worse than that as I got to the end of my time there, the company was being starved for capital investment. And so we couldn't even afford to buy the testers to ensure that we were meeting the specifications. I remember losing business at RCA of all places because we were supplying them a current mode logic device we developed, an integrated circuit, a microchip. We couldn't guarantee the quality because we didn't have enough testers to test all the parts and it was grim. And I thought this was a tragic situation for a company and I'd remind you that at the time Texas Instruments was already a giant company when Fairchild got started. And Fairchild got started in '57 as I recall. '58 Bob Noyce invented the integrated circuit, the monolithic Integrated Circuit.
I joined in '61, but by '67 and '68, we were in a serious retreat because as I say having won the Minute Man program away from TI with our new technology and our innovation, we'd lost the second go around to TI approach which was the wrong approach, but because we didn't really have the support of corporate back in Syosset we didn't have the capital being invested; not to mention the reward to the innovators. So it was a sad time and Fairchild began to decline and people started to leave.
They promoted me up to come to Mountain View to become, which is kind of a funny, is a great story, actually, to become the Linear Circuit Manager; Product Manager. And it, and that story needs to be told because it affects, it brings Bob Widlar into the picture. I was in L.A. and I, I was probably, no, not probably, I was the only knowledgeable electrical engineer at Fairchild who was in the applications and the marketing organization who was a legitimate design engineer, in analog who, who gain phase relationships and amplifiers and, and, and, and, and basically equipment. And Vic Grinich had some background in that area, but, but, but there were not a lot of others guys. And it turned out that Bob Widlar, I was in L.A, and Bob Widlar had joined Fairchild from Ball Brothers. He was, very background, very similar to me. He was working for an equipment company, Ball Brothers. I think he had gone to the University of Colorado, and they were in Colorado and I had worked at this Electronics Specialties in L.A. and we both left our companies to go to Fairchild and, and Bob somehow got into Fairchild R and D, but he didn't have a, the typical R and D degrees that all these guys had. He, he had a bachelor's degree, out of the University of Colorado and he's, Rob, you know, they had a very pedigreed organization in R and D and, and, and he was very much a radical. And they, maybe even some people say not all together stable, but, but he was a very aggressive and he made a relationship with a fellow by the name of Dave Talbert who was a process engineer working in, in Mountain View in the wafer fab area. And, I don't know what they hired Bob Widlar to do in R and D. I can't imagine even Gordon Moore or Pierre Lamond hiring him, but somebody hired him and, but it made no difference what they wanted him to do.
What he decided he was going to do was design an amplifier. And, and apparently they had tried to design some amplifiers using these digital processes that they had, and they, it was not possible because they breakdown voltages weren't there. They didn't have an epitaxial material that could give them any breakdown voltages. The leakage were, were terrible. They had no PNP transistors. And so Bob got together with Dave Talbert and they both were heavy drinkers, very young, but, and they would, and Bob Widlar talked Dave Talbert into moonlighting and developing a process that he could, he could build an amplifier with. And this was all done while Bob, Dave, Dave Talbert was, was literally working, his day job was running as process engineer working in a digital line at, at Mountain View . And between Widlar and Dave Talbert, they developed this process that would give them, initially it'd give them I think about 25 volt breakdowns. They eventually took it, they got it up to where it would give them about 35 volt breakdowns. Had a lateral PNP that had a beta of point five. It was just literally terrible. But it was all done without any Fairchild sponsorship whatsoever, or knowledge. And the story's going to go on for a bit but it's really a great story. So unbeknownst to any of the management at Fairchild, Bob Widlar, who is, a Bachelor's Degree junior engineer at Fairchild R and D has this amplifier that he's developed. And, he, he doesn't tell anybody about it but he does find a way to expose it to a few of the Fairchild salespeople, and the two guys that he exposed it to were Floyd Kvamme, who had, who was calling on IBM at the time, and me, which, because he had determined that we both were technically knew what we were doing and we understood him and he brought, gave us samples. And we started, you know, showing these things to people and, I mean the reaction was phenomenal because it would reduce the board, the board sizes, you know. Every, most of the computing that was done in the defense industry in those days was done fundamentally with analog computing, and so this thing was a huge advantage to reducing size and weight. So there was a lot of customer interest in, and because of this the management of Fairchild found out about it, I mean they heard about, and they, they, What is this thing? What is this, this 702 amp? What is this, you know, what is this product and they found out that this guy, Bob Widlar, had designed it and it was being built at Fairchild and there was enough market interest, very, that Tom Bay and Bob Noyce decided that they would, that we ought to sell this thing. So they go to Bob Widlar, now this is all occurring in about 1965. They go to Bob Widlar and they introduce themselves. They literally didn't know him, introduced themselves to him, tell him, you know, of course he knows who they are and they said, you know, we're going to you know this circuit you designed, we're going to make it a Fairchild product. We're going to announce this thing and, you know, we'll sell it. And, and he said, the hell you are. What do you mean? You're, you're not going to sell this. You guys don't know anything about this product. Nobody in this company knows anything about it. You can't sell this. He says, "I don't want you to sell it. You don't know how to, you know, you don't know anything about it." That conversation went on and the fact is Widlar refused to cooperate. And they, and they walked away shaking their head. Nobody, tell this kid telling these guys, and they were just irate as, you could remember how they could get.
And they had just, they would have killed him but they, it would have been like killing the golden goose. This product was hot. And Widlar's telling them they got no business, you know, with it. They don't know anything about it. They didn't, because he had been rejected many, many times by all, and he was an outcast. So he was, he had a reason to be upset and be arrogant, but he insisted that they weren't, he wasn't going to do it. So they would go back to him another time and they'd tell him, you know, they'd say, "Well listen, you know, what do you, what would make you comfortable with us being able to properly represent the product?" And he said well, you've got to get, you know, you'd have to have an organization that understands these things. You have to have... Well, if we give you a, if we put a product manager in charge of it that, you know, that you, that you're comfortable with, would you be okay then? He said, "Yeah." And so I get this call from Bob Graham. And, you know I'm happy as a duck down there doing what I'm doing. I get this call. I have no, I've been there a year. I have no reason to expect to get promoted or anything. I get this call from Bob Graham and he says Jack, who wasrunning all the product marketing, he says come on up. We want to interview, we want you to interview for a job. So I go home and tell my wife and wow.
So I fly up there the next day and I don't know, I had been around an airplane about five times in my life. I mean, I think I'd been up to Fairchild once with a customer and I'd gone to, when I'd traveled to play baseball but, so that was a big deal. I mean, I go up there and I, the interview lasts about, I mean, it couldn't have lasted ten minutes. I mean, it was just a routine. It wasn't like, and I'd come back and they call me the next day and they say well, you know, get your house for sale. You're going to be the Linear Circuit Product Manager. And I went, "Wow." So I, you know, I go up there. They bring me, we got to move up there in about two weeks and I walked over and I get this office and, nice office. Big office. Big for me. I had no office. This is the first office I'd ever had in my life. I just began building a very competent analog organization at Fairchild which ended up becoming the most competent in the world. I hired guys like Mike Scott. He's at National. I hired Mike Markkula, Gene Carter, you know. We had about eight or nine of us and we at one time had eighty percent of the market and so for a couple of years we did that. And my job continued to be. They didn't fire me. I, they did well. But a major one of my responsibilities was babysitting Bob Widlar. And he would almost talk to nobody and he would only talk to me on, you know, if I could get him in the right mood. And he was still secretive as hell. And, so, you know, and then Bob hired Jim Giles. And, Dave Fullagar was over at Fairchild R and D. He'd come out of Transitron, and Dave, and then, the story goes on and on but Bob eventually left to found National Semiconductor. He and Dave Talbert were really the founders of National Semiconductor. And then Charlie Sporck joined them later. But Bob left and I remember Widlar telling me, you know, he and Talbert for the first six months literally built an epi reactor. I mean, the two of them. I mean it was like ground, you know, ground zero. You didn't go buy anything and Widlar and Talbert actually built one. And, and then after they started making some linear circuits, Charlie and Pierre and these other guys, you know, came over. But when Bob Widlar left then I pretty much became the, the guy in charge of all of the analog effort at Fairchild. And Dave Talbert, Jim Giles moved over, you know, to replace Bob Widlar and we ran that operation for about another three years, two or three years and then I left and founded Advanced Micro Devices.
And, another time we're at the Wagon, this is the Wagon Wheel which is where we always went. I walk in there and, and Bob Widlar's got one of my guys, Mike Scott, who ended up going to National. Did you know Mike Scott? Okay, Mike went, went to National and ended up doing a great job and then was the CEO of Apple Computer. But when I hired Mike, I hired him out of Beckman Instruments, and he was a, just a very uncouth, inexperienced young man. And we had, you know, bright as hell, aggressive, overweight. He's from Cal Tech, and so we, Mike Markkula and I would, you know,spend a great deal of time trying to teach him, you know, literally how to eat with a knife and fork at times. I mean, that's how crude he was. But, and he was committed to succeed and a nice kid. And one night I, walked up to the Wagon Wheel and here Bob Widlar has him over, you know, at the bar that, it was a rail bar like this, and, Widlar's just harassing him. I mean just incessantly and so, and Widlar liked to fight, and thought he could fight, pretty good. And, and so finally, you know, he just tells Mike Scott, you know, they're going, they're going to fight, they're going to go out in the parking lot and fight. So they go out. About fifteen minutes later Mike Scott comes in. I mean, Widlar, Widlar didn't. But I mean it was, like this kid. Mike Scott just absolutely clocked Widlar. I mean it was like, that was the end of Bob Widlar harassing Mike Scott. I'll, you know, that was good for all of us when that happened.
When we opened the Fairchild Research Laboratory on the Stanford Campus, Sherman came out for that. And Gordon and Bob Noyce and I took Sherman to dinner at a restaurant down here in Atherton on El Camino Real and in came Jerry Sanders with - who was at that time the sales manager responsible for the IBM account, which was one of our major customers - Fairchild's major customers. And Jerry being his usual ebullient self thought, "Gee, it would be nice if these two salesmen or purchasing people met Sherman Fairchild," after all, he was the director and
Yeah, living legend.
Yeah right. So I said, "Sure Jerry, come on over and join us for dinner." And so they did and Jerry Sanders had never met Sherman Fairchild before, but that didn't stop him. He said, "Sherm," he said, "I think we're dating the same girl." So these two IBM fellows wanted to crawl under the table. And Noyce and Moore sort of looked at me but Sherman brought out his little black book and said, "Oh the secretary out at Republic Aviation." "Reception-that's the one," talked about her and then we got back talking about IBM. But that's the kind of - he was that easy man to get along with, Sherman Fairchild was.
ASIC and CAD
I have a verbatim transcript here of a meeting that occurred at Fairchild that caused Fairchild to get into the LSI business. I call it the LSI story. It's dated September 8, 1967 and the attendees at the meeting were Bob Noyce, Tom Bay , Gordon Moore, Dr. Bob Seeds that John mentioned a minute ago, Jerry Sanders, Jerry Larkin, Maurice O'Shea, Bob Shriener, John Sentuse and John Hulme. And it's a very interesting story.
Talking about Gate Arrays which people thought was Gatorade at the time because nobody had ever heard of an array of gates that could be connected together to perform any digital logic function that you want. And Maurice had curves that showed that the number of these gate arrays was going to go off into the sky and hardly anybody believed that at the time. I think it turned out to be true. There was an exponential growth. But the
interesting thing about that is all the discussion that went on in this 78 page document resulted in Bob Noyce making the decision to start this department with Bob Shriener as the department head and working for Bob Seeds at Fairchild R and D and the R and D division, of course, was run by Gordon Moore. And that decision was made and the department was started and then shortly after that a bunch of us moved up to R and D. and started this LSI department.
We tackled such problems as how one makes small quantities of quite complex circuits economically and came up with both of the approaches that have proven to be useful: the standard cell approach and the gate array approach at that time. Well, neither of those became practical applications while I was still at Fairchild. Subsequently they have become...
Yes, you find that 1980 at LSI Logic is a clone of what we did at Fairchild. With a more modern semiconductor technology, to be sure, but the techniques at Fairchild... we developed logic simulation, place and route, we developed VLSI testers... which later became the Sentry series... so all that was done under your leadership
I remember Shriener asking me "Do you want to go on the MOS side or the bipolar side?" And I said "Well, what's MOS?" Well, I knew a little bit about it from the device Physics course, but I said "I'll try that, you know, it sounds like fun". That was kind of a watershed decision. And that's how I got into it.
Well, the Gate Array version never really worked.
No it didn't. The in the MOS case it was a it was a pre-diffused set of eighty gates and it was customized by two layers of metal. And all of that could be done. What wasn't accomplished at that time was to make stable MOS devices. And so with the two-layer metal process they were all hopelessly unstable and there were so many ions going through people hadn't learned how to getter yet. And to make other things to make them stable and so they, basically it never worked. And ultimately I got frustrated at that and said, you know, to Shriener and Vadez "Isn't there something else that I can do?" And we started playing around with this standard cell concept.
And that was the first Standard Cell.
I think, well there was, there was an effort or there was a description of an effort at NSA I think at that time. They were talking about doing Standard Cells, but I, I don't know if they had implemented anything. Certainly, you know, ours was the first implementation out here.
And it worked.
And it worked.
It worked well. Can you show your book from 1966.
Sure. This book from 1966 is the Handbook for the Micromatrix, which was the pre-diffused pattern and this shows the two layers of interconnect and the bonding pads and you can see the date on here is 1966. I joined in February of '66 and this is in November, October of 1966. One of the things that we did here, I've got some extra papers in here. One of the things that we did in this technology was to not only describe how we did the circuits and I'll show some of the functions here, which are similar to the building blocks that are made today, if I can find one; like so. Different cells structures and then the metal interconnect pattern that would accomplish that function and so on, different cell structures. But besides having to design, the design approach we also had in those days a bread boarding approach, no longer do people do this sort of thing. But we would actually print out the two layer interconnect system that we had for creating the cells and interconnecting them and then populate a PC Board like this with eighty metal cans of transistors, I'm sorry, of gates and then yellow wire it to plug it into an exerciser to test it.
This was really pre-simulation, logic simulation.Pre-logic simulation. What we could do though at that time was to prove out the test sequence there was a test...really can't see much here, but this is a flow diagram of how to go about creating a test pattern a sequence of test patterns to exercise that bit of logic. And this would be ready by virtue of the PC Board mock-up or bread board prior to the integrated product coming out. These worked, but unfortunately the two layer metal devices didn't work or at least they didn't work for very long.
You were recruited to Fairchild.
And what was the task that...
Well, the task was basically to continue and to extend what we had started at IBM. The graphic display project there had gotten some notoriety and there definitely was interest on the part of Gordon Moore and Bob Seeds who worked for him as you know, yourself, Rex Rice, in continuing to work on that sort of a system. We hadn't actually developed a system at IBM to layout integrated circuits; it was only to layout these circuit modules or packages as you might call them. And we wanted to really get serious about developing a system that would do integrated circuits. Clearly, we needed a graphical display that was something other than a used radar set, so we set out to design from the ground up a graphical display that would allow us to really have the complex images that would be required for even the integrated circuits of the day. So that was the first project that we really set out to do.
And in fact we did that. We worked with another vendor and developed this rather complex display that we programmed to actually be used in the layout of integrated circuits. I wasn't as involved in that project, actually, as I had been in the previous project because something else happened, but I was still a member of the group and worked alongside the people who actually were doing the programming of that, there was a gentlemen named Steve Zucker who actually did most of the programming and, in fact, that work was reported in The Scientific American. There was a Scientific American paper on that project a few years later. The thing that sort of diverted me was I was still very much interested in this problem of how do you communicate a complex design to the computer. And not long after I got to Fairchild, I think Hugh Mays walked in one day and laid a paper on my desk that was written by a gentlemen named Ulrich, who was at North American Aviation on logic simulation. And I had thought years before that it might be interesting to simulate the operation of a circuit on the computer because, again, if fit with my vision of having, of interacting with the computer to put a correct description of the circuit in there.
But computer simulation was a field that I was only peripherally involved with and it was really being applied in very different areas in, oh, defense work and some other areas that were quite different from what we needed. Anyway, this fellow at North American Aviation had addressed the explicit problem of logic simulation. That is the simulation of the logical operation of a computer-like circuit and I gobbled this paper up in an hour, I mean I was so interested in it. And suddenly I realized that in this simulation technique lay the key because you could have an engineer enter a circuit into one of these programs and then he would work with the computer and actually simulate the operation of that circuit. Now remember, he's not working on the actual circuit, he's working on a computer model of it. So once he's satisfied with the way this simulation behaves, two things have been achieved. The computer has now captured a description of the circuit and, at least as far as the engineer knows, it is correct because he's checked it out on the computer.
So I charged off and started writing, which I think was probably Silicon Valley's first logic simulator, which you named, Rob, you know it very well, it's called Fairsim. And we worked together on that, I guess, for five or six years and we created the, what you would now call a front-end EDA environment. So you could enter a circuit, you could simulate it, and I built this language called Simulation Control Language where you could actually put pulses on it and clocks and check out the behavior on it and then you would be sure it was correct and you had a good description in the computer.
The other thing that we did, at least I think we tried to do and this was probably some of your influence, is rather than create some exotic new circuit family or exotic new engineering technique, we tried to make this simulator as familiar as possible to people who were already designing circuits. As you know, the prevalent method for designing these circuits would be to breadboard them. You'd go build a wire-wrapped breadboard and you'd plug in discrete components that behaved in the same way that the components you wanted to put on your chip would behave and then you'd wire this thing up and then you'd operate it physically and I was going to replace all that with simulation. But what I didn't want to replace was the general methodology, the general thought process the engineer used. So we went to the Data Books and your group really got the standard 7400 Series Logic Functions and then we put these elements into the computer in simulation so that an engineer who had designed a system with a certain particular set of logic components that he was familiar with would find the computer equivalent in Fairsim. And I think that was a pretty key thing too because we then began to, if you will, train a body of engineers to use this methodology, But it wasn't too bad because they were already familiar with the basic elements that they were working with, it's just that they were now dealing with computer models instead of the real physical thing. And so we put that together and that sort of constituted, there were lots of other things that went on, but that kind of constituted what we called "the front end of our system".
In the meantime, my colleague from Stanford, who was a year behind Hugh and me, joined Fairchild, Ed Jones, and he initially started working on test generation. Ed's an extremely bright fellow and had a methodology whereby we could figure out how to test these circuits when we built them. And that was very important because as everybody knows, not every circuit that comes out of a fab is good, so you have to have an efficient way of testing each and every circuit to know which ones to ship. Well, at the same time, Fairchild was developing a series of computer controlled testers so that they had computers in them and they could be fed with data, which would then automate the testing of these integrated circuits. So I had another level of automation now that we could use and Ed did the original software work to feed these testers with the right pattern so that when the circuit was fabricated we could make sure that the actual circuit worked.
The final thing that Ed did too was the other part of it, the key part as I said earlier, is you now have to take this abstract computer model and translate it into the actual masks, the actual tooling that goes into the factory and that's called a physical design system or a place and route system and of course we were in the infancy of that. And Ed and several of his colleagues also worked on creating that and so by, I don't know Rob, you can refresh my memory, somewhere by the early 70's we had now a complete ASIC system and the other thing that your group did of course is they developed the underlying circuit structures and the chip architectures and as I remember, we had two product lines, MicroMatrix and MicroMosaic.
So we now, literally, had at Fairchild, a complete system which went all the way into a factory, really, and could allow engineers to specify circuits on a computer and end up with the actual circuits coming out of the factory being tested. And I suspect that was the first operation of that type.
It was. I think it was a seminal work.
And it was interesting that our reputations were severely damaged by having done all this neat stuff.
Right, Yes, that's certainly true.
And we had to rewrite our resumes and get rid of all of that.
Yeah, there were two problems with that project. One is it really was hard and the computing equipment that we had in that era was so expensive and so limited in capability, really. I remember we had this big 360, 370, 36067 IBM computer, it would probably just barely fit in this room and it was a tiny fraction of today's PC in capability and it was very expensive, millions of dollars a month to operate and so it was a bit impractical.
And then the other great development that, I think, diverted the world's attention from what we were doing for quite a while, was, of course, the invention of the microprocessor because now a semiconductor company could build one part type and, you know, apply it to all these various applications and these specialized custom chips that we were getting very efficient at building but they still, you know, you had to design a separate one for most of the applications. So I think the combination of the fact that the computing hardware was not really where it needed to be and the fact that for a while at least the semiconductor industry thought you could do everything with a microprocessor, which I believe it later turned out not to be true, but it took them a while to get there meant that that initial project, you know, was not a business success.
I think we have to agree with that. It was a technical success in the sense that we were able to do this but there was also some problems that I won't go into in actually fabricating the parts that, you know, we had some difficulties there too. But fundamentally, I think we did demonstrate that every bit of that was practical and it was kind of the economics and the stage in the development of technology that we did it. It just wasn't quite, its time hadn't come yet but I'm not ashamed of it one little bit. I think we, it was the seminal project of what is now called the ASIC.
Yes we started out with an MOS that was a thick oxide process which had a very thick field oxide to prevent field inversion, but there were lots of processing problems associated with thick oxide MOS and there was another opportunity or another process called a thin oxide which had antimony field stops and that process was running in prototype format in the, in one of the lines in the R&D Fab.
In fact, right across from the office that you and I shared Rob. And so I decided to put together some cells, some functions in that process and we made, you remember the term kit parts? We made a bunch of kit parts, which were individual little functions with the antimony field stop process. And that worked and then we, we put together a concept which is shown here for a Standard Cell Gate Array really Standard Cell array where each of the cells are different individual functions interconnected. In the original technology two layers, one diffusion and one metal. This is a paper that I gave I think, it's at the IEEE Session in St. Louis in 1968 if I'm not mistaken. Jim Koford gave a paper at that same conference.
And today in 1999 it's exactly the same thing except that it's ten thousand times more complex.
But it's the same organization, same concept, same ol', same ol. '66 to '99.
Right. Well we quickly out grew. You got tired of the high impedance associated with the diffused interconnect. And I can remember reading an article or paper written by Ken Moyle who was at National at the time extolling the virtues of the, the then unproved thick oxide metal gate process and detracting the silicon gate process, which had been invented at Fairchild and which National didn't have. So I decided it would be a good idea if we reproduced this Gate Array family or this cell family in the silicon gate technology and got the go ahead and do that.
And of course the, that was a much better family because we really said we had like two and a half layers of interconnect. We could still use the diffusion a little bit at least inside the cell and then we use the polysilicon and the metal to complete it to an XY coordinate interconnect system. And that worked very well and that's the family that we really took off on and built up not only the circuit group, but also the CAD group that you described.
Rob, at Fairchild, what products were you involved with?
Well there was first something called Medium Scale Integration, which is so-called MSI and consists of up to a hundred-gate complexity. And we defined those things like four bit counters and Arithmetic Logic Units and things of that nature and we did such a neat job of it that today, 1998, those functions are still available, same pin outs, same basic function as we came up with way back when. But my real love was Large Scale Integration which again in those days was anything over a hundred gates and so we started and did the seminal work in Gate Arrays and Standard Cell and Computer-Aided Design. And just as Fairchild was the mother of semiconductors, so was Fairchild Micro-mosaic, Micromatrix; the two custom capabilities, they were the mothers of today's Computer Aided Design and of the so-called ASIC business.
Rob, so continue your story with Wilf Corrigan, I understand you were one of the founders of LSI Logic.
Yeah. I hadn't done engineering for five years, but I really could, I knew what everybody was doing and I told Wilf, we can blow away these people in just a couple of years and these people being General Electric, IBM, Hughes Aircraft, United Technologies, Motorola, in other words, Fortune Five Hundred kind of companies and our little start up we could do better. So he offered me the job as VP of Engineering and sure enough we blew away those companies!
Today those that I mentioned, none of those people are in the gate array business or in fact the ASIC business, or in most cases not even the integrated circuit business or semiconductors. And it just showed we were one of the very first to show that a small fast-moving start up company what it could do.
Why did you guys leave and found Intel? What did you not like about Fairchild?
Fairchild went through a peculiar period and I don't know all of the history, but they fired John Carter as CEO and put Dick Hodgson in and six months later almost six months to the day Hodgson was out as chief executive.
Anyhow, they had fired two CEOs... or two CEOs were gone within a six month period, and they were trying to run the company with a three man committee of the board of directors, while looking on the outside for another CEO. The likely internal candidate was Bob Noyce... you know, certainly well, qualified by any measure, he'd run the most successful part of the company it was a world, leading operation, but they were going to bypass him. That kind of ticked Bob off and he decided that he didn't like that very much. And knowing Bob wasn't happy and was going to leave, and that we were going to have somebody else coming in from the outside, who'd probably want to make major changes in the operation I headed... I said "Ah, I think I'd rather leave before than after." So the two of us decided to leave and then went out and got financing to set up a company to look at new technology and new product areas in semiconductor memory.
Well, Fairchild Camera and Instrument was a company that was located in Syosset , New York . It's in Long Island . And it had, other than, when Sherman died the attitude changed a bit. They had a very, what I call an Eastern mentality in that they didn't want anybody to have any options in stock and the eight entrepreneurs who started Fairchild Semiconductor decided individually and together that they would gradually peel off and, and form their own enterprises because they couldn't get any more equity in, and a lot of the people there felt that they should be giving equity to some of the people who had, hadn't helped start the company but were instrumental in its, in its success. And Fairchild Camera and Instrument were, was unwilling to do that. So gradually they peeled off and finally by 1968 there were only Noyce and Moore left.
And then, then they decided to leave.
Then they decided to leave.
And you were instrumental in that as well.
So what did you do?
What did I do? Well, I got a call from Noyce one day in 1968 saying, well, I'd been talking to him off and on, anyway. And finally in talking to him about the possibilities of doing something, and finally in 1968 he called me and said, "Gee, I think maybe Gordon and I do want to leave Fairchild Semiconductor and, and, and go into business for ourselves." And so we talked about it for a while and, I asked him how much money they needed and he said two and a half million dollars. And said, well, how much money are you guys willing to put up? He thought about it for a while and said, "Well, we'll each put up a quarter of a million dollars," which represented a fairly good portion of their net worth at the time. And so I was able to raise the two and a half million dollars pretty quickly for them.
Now did they have a business plan, a written plan?
I wrote the business plan. And it was a page and a half, and I had raised all the money before I even sent the plan out. People knew, knew me and knew Noyce and Moore and they were anxious to, to invest.
Well, what was Bob Noyce like?
That's a very difficult question. Because it depends on from what, where you're looking at him. He's a very, he's probably the most complex man I have ever met in his interests. He's an inventor. He's a, an athlete. He likes, likes learning all kinds of new things. Doesn't like to fire people, or he didn't. He liked to help people make their own decisions. He was interest, he, he, he was interested in music. He had a madrigal group. He's just a, as I said, extremely complex in, in his tastes.
And of course, Gordon Moore.
Well, Gordon was completely straightforward. There's not much that you don't see that isn't there. I mean, there isn't much there that you don't see. He knows where he wants to go and, and, and leads people there. I, he often makes the statement that he's an accidental entrepreneur and I don't think that's quite right. Gordon never stood out in the beginning when we were putting Fairchild Semiconductor together. And I don't actually remember his being very active. He was more a passive type. But as time went on, Gordon kept on growing and growing and just grew into various positions until he became now the Senior Statesman of the semiconductor industry. And I don't think any of this was accidental. I think it was, it would have happened regardless of, of Intel.
Had Gordon Moore and Bob Noyce started Intel yet?
No, no. They started, they started as a matter of fact, after I had proven that it was working... we had the 3708 was, you know... came out already and basically they knew that the technology was working. In fact, I suspected they were going to use silicon-gate technology at Intel and I told... I told Bob Seeds I remember, in those days, I said, "Hey, I had a hunch they were going to use silicon-gate technology." And Bob Seeds said, "Well, if they do that we're going to sue them."
Which they didn't do.
Yeah, which they didn't do but I remember that I was a boy from Italy , I didn't understand the ways of the States, so suing was something very strange for me in those days. I mean, it's very clear that the silicon-gate technology, where it came from... and there's no question about that. As a matter of fact, later on when Les patented the idea of polysilicon to silicon contact--which was my idea at Fairchild--and I found out in `74 that he actually had patented that idea as Intel.
But then... so you decided rather than fight `em, to join `em, so in 1970 you went to Intel.
Yeah, in 1970 I decided that I had enough of Fairchild. With Noyce and Moore leaving, the new management team coming in, Fairchild was beginning to really have a slow but steady decline. And also my interest was more toward... toward design and I was, you know, getting less and less interested in process technology, although I managed to develop in `69, n-channel polysilicon devices. I also developed bipolar and MOS in a single... what now is called BiCMOS... we had... I had early BiCMOS devices built in those days, just the beginning of it. And I also managed to make thin-film transistors using polysilicon material and so... I ... it was a very... particularly creative period of my time and I enjoyed Fairchild Labs but it was time for me to move on.
And so I went to my old boss, which was Vadez, he was my boss at Fairchild as well and he had joined Intel in, basically soon after the... Intel was founded, and I called him up and I asked him if he had a job for me because I wanted to develop in silicon-gate. Fairchild was... was very... you know, still did not have a good silicon-gate technology in production that I could use and so I decided to leave.
Well anyway, so Noyce and Moore were getting ready to found Intel
Bob told me he was going to do that. He was still there and hadn't left and the public didn't know he was that going to go do that thing, but they sent out the chairman of the board of directors, who was a lawyer, to get me. And I just told him to shove it up... something, you know? I had no interest in it. I really didn't. And I knew I'd passed them, I'd passed TI, I thought, "What the hell do I need... I don't need your problems..., you know. " So I wanted to stay there. I wouldn't have gone if Bob Noyce if... I had great respect Yeah, well it is in a way. I hadn't thought of that either. I was just doing the best I could at each time. And I'm a wanderlust sort of fellow anyway. I get bored after a while doing the same thing. And each time... to me, it was a success, it was a success... I was a success at Bell Laboratories, I was a success at Harvard. My nine graduate students were the brightest ones at Harvard--they really were, you can go talk to them and see who they are. I'll give you their names if you want. In fact, some of the professors were raising hell with me because "You've taken all the good students and we're left with the junior students.” I said, " You know, they just like me."
So what was the... it was a challenge, was it...
It was a fair challenge. Why did I go to the Navy when I didn't have to? I could have gotten... got a job and if you had a degree in engineering, the... they weren't gonna take you away from some company that said they had to have Les Hogan. And I could have done that but I didn't. I wanted to go to the Navy. I just wanted to do different things.
So you went to Fairchild. So, what did you find when you got there?
It was a disaster when I got there, it really was. They... and most of the blame goes to the people at Syosset. My god, they were building all kinds of things. They were building the big machines to print newspapers, you know. So I spent about a month, maybe a month and a half, finding out what the hell I was running other than semiconductor and I just got a team together and said, "Go get rid of these guys. Throw everything... Sell it to anybody at any price. Get out of these... all these businesses. We have really one business, that's semiconductors." And we did, and we sold 'em, you know, at reasonable prices, you know. We didn't lose money on any of them. We didn't make any money on any of them either, but we sort of broke even.
And I was the president of the company until 1974 and in 1974 the sales, which were almost entirely semiconductor at... by that time: $384 million in sales at Fairchild with a profit of $27 million..
Now you brought quite a few people in...
Yeah, well, yes... I didn't really go in and... I honestly didn't ask them. I figured that if the good ones came to me they'd have a job but I wasn't going to a... you know. They had to come to me. I didn't... in all honesty... not to say that ... to protect myself from Bob Galvin who wanted to put me in jail. That's neither here nor there...
The thing is, I just... they came. They came of their own... they called me up, they called me up from Taiwan , you know, places like that. "Hey Les, is this true?" And I said, "Yeah, it's true." He said, "I'm gonna stop off and see you there as soon as I get... I'm coming up to see you at Fairchild." And they walked in, "Got a job for me?" And I said, "You're a damn good guy." And I said, "I don't know yet 'cause I... you know, I'm not familiar with what's going on here... but I'll take you on, you know. We'll make money on it anyway, you know, I'm not worried about that. We'll have profit and we can pay you and we'll figure out what the job is gonna be later on, but you got a job."
They went home, went back. They told Fairchild, err... Motorola: "We're leaving, we're going with Les." You know, there were about three every day for a while.
So Motorola sued.
Yeah, they sued me. Yeah. That's all right. We won.
But now, and of course I was there at that time, there was a... seemed to me a great cultural difference between the people from Phoenix and the people from...
In what way?
That, that... well, I mean, we had people like Jerry Sanders... very flamboyant...
At Fairchild, there was a culture that everybody went to the Wagon Wheel.
... after work. Not only Fairchild people but competitors and they all talked. And compared notes. And the Motorola people were shocked.
Yeah, they were very shocked that you would do that. We were a very... even with the size of the Motorola activity, we were ourselves. We knew... we wouldn't tell anybody on the outside even what we were thinking about. You know, it was just.... there was a difference there and I don't know why. I... I'll say this, in all honesty although it... the people that worked for me, wherever I was, whenever I was, when I got to know them and they got to know me, they liked me, they really did. And the ones that came from Motorola were evidence of that situation. They came to me. They wanted to be wherever I was. And I wouldn't take 'em if they weren't bright.
Well, you know, you have some guys every once in a while that aren't too bright. You find that out a year or two later. I used to a problem... a thing I used to do, about every year I demanded a 5%... you had to get rid of 5% of your people and you know why? Because they didn't have the courage to fire the deadheads and every year, there are about 5% that are deadheads. And they didn't have the courage, they were too nice.
And then in '68 Les Hogan was given the job as president and CEO of Fairchild Camera and so he invited seven of us to go with him to that, to California , so we did. And if you remember they called us Hogan's Heroes at the time, it was a very popular television
series called Hogan's Heroes at that time. And so of course that - because his name was Hogan, this became Hogan's Heroes at Fairchild.
Fairchild was underinvested; with Hogan and I and the other people arrived we were puzzled that there was no capital investment, that all of the assembly and test equipment, all of the diffusion equipment, was ancient, it was very backward to haven't done any of the things that we'd been doing at Motorola and so our initial conclusion was we just have to put a massive infusion of capital into the company to revive it. And of course as Hogan arrived, Bob Noyce and Gordon Moore left and of course, and Andy Grove and of course they took the silicon gate process with them at the time. I mean...
If somehow magically I could come back in time and say what I would have done, I would have sued them and taken all the strategies that Intel later employed to get their position in the market place, I would have sued them because, and prevented that company from taking off with the basic technology that was developed at Fairchild.
And it was about that time of course that Bob Noyce and Gordon Moore left to found Intel, that was in 1968. At the time I was still the Worldwide Marketing Director, by that time I'd been elevated to Worldwide Marketing Director, still I was very young and thought we could still change the world. Dick Hodgson who was the president at the time, you know, was a guy I had great admiration for. I was given a bunch of stock options and told that, you know, world was going to be great and then when the world wasn't so great, Fairchild had to cut back. They decided they needed some new management and we were shocked. They brought in, Bob Noyce left as I said, Charlie Sporck who had been General Manager of the business left to form National. Charlie hired me, he thinks he hired me. He made me an offer to be his Vice President of Marketing Worldwide and I said I couldn't do that without telling the people at Fairchild first. And they persuaded me that someday I would be the president of Fairchild, that there was no limit to where I could go.
They laid some more stock options on me and I made the mistake of staying. Turns out it was the right thing to do as life worked out, but I didn't know it at the time. Any way Charlie Sporck, basically thought I had made a terrible mistake and he found out that the reason I had decided to stay was that, I had misspoken up until now. I wasn't yet the Worldwide Marketing Director. I was a sales manager and I said I wanted to be the Worldwide Director. If I would have joined Charlie I would have been, but I said I wasn't going to stay on and not be. Well there was a problem because there was already a Worldwide Marketing Director at Fairchild named Don Valentine, who was a good friend. But I said, you know, Don's there and I'm behind Don and I don't want to wait.
And Tom Bay said well how much time will you give me? And in my brash youth I said, 'till Friday. And I think this was on a Monday. And on Friday Don was terminated and I was made Worldwide Marketing Director. I was shocked. So there I was at, you know, 30 years old, 31 years old, and wow, just had the world as my oyster. But as it turns out Fairchild had to change managements, you know, Charlie Sporck left, Tom Bay was promoted, it didn't work out. They brought in a whole team of guys. Lester Hogan of Hogan's Heroes. Very interesting time. C. Lester Hogan is a brilliant guy and he'd made Motorola quite a success by automating the production of transistors, but of course transistors were old news. But that's what made Motorola's success. So he came in and instead of taking advantage of the wonderful innovations and technology that was in place at Fairchild, instead he seemed to want to make them over in Motorola's image. And as I said, I was a brash young man and I couldn't help but tell him why I thought a lot of things he was doing was wrong.
But I guess I should take the time to tell one story that cost me my job. We went to visit Digital Equipment Corporation, in those days it was called DEC. Now it's just called Digital. Now its gone, it's part of Compaq; which is now gone, part of HP. But the founder of Digital had a meeting set up with Les Hogan. And we went to meet with him. And when we got there I had properly briefed Les Hogan on what we should say about our proprietary family of digital building blocks which were TTL building blocks called MSI, Medium Scale Integration, the 9300.Ken Olson who was the founder of Digital Equipment was quite a good engineer and I thought he would be very responsive and receptive to our pitch on why these were a superior way to assemble a computer. And why they were built with a system in mind, as opposed to just being random collections of gates. Well, we talked and Les said to Ken, so what do you want us to do? So Ken said, well you know I've got a problem, Texas Instruments has their series 54 and there's a lot of sources of that and you're a sole source on the series 9300. Sure would make my life easier if you'd just agree to build series 54/74.
And to my amazement Les Hogan said if that's what you want, that's what we're going to do! Well, what did that mean? It meant that all of our proprietary development, all of our invention, all of our innovation, all of our competitive advantage was down the tubes and all we had now was the opportunity to be an alternate source to TI who was already a giant manufacturer. So after the meeting, we were outside and I was just really so upset. I'd worked so hard, my people had worked so hard, all the engineering people had worked so hard to win that design and all we had to do was to say series 74 is not competitive with our solution. I'm sorry, but this is the way to go and I know he would have gone. I mean you could tell, he was just shocked that we agreed. So Les Hogan said, what do you think? And I said I think you just wrecked the company.
Wrong thing to say to the president of a public company, especially when he has just recently taken over. So I think that's what sort of signed my death warrant with Fairchild, but just to close that story out and move onto AMD, which is the pride of my life; short of my daughters, of course. One day, I decided that, which is amazing in retrospect, that I was the best candidate to run the semiconductor operation. As I had mentioned earlier Fairchild Camera and Instrument of which Les Hogan was the president, was the parent company, but he was also acting as Vice President and General Manager of Fairchild Semiconductor, which was really the heart and soul of the business. But at some point in time it was pretty clear he was going to name somebody to be president of Fairchild Semiconductor, at least I thought he was. So I said I'd throw my hat in the ring.
So I remember Les saying to me well, Jerry of course you'll be considered, you know, you're one of the smartest guys I know, and he said, but let me ask you this, what if you aren't named, what if you aren't the guy selected to be the president? Now I know now that the only thing to say was, Les whatever you want I know is, whatever you want to do, I'm sure that's the right decision and I'll support it 100 percent. But, you know, when you're 31, 32 years old, I said you know Les I can't guarantee my behavior. Oh, wow! So not guaranteeing my behavior was perceived by Lester as a threat. So he hired a guy from TI to replace me and bingo, I was out.
One thing I will share with you now that I've never shared with anyone else, just before I came over to... left Motorola, I had an operation at Mayo Clinic and they damned near killed me. And it took several years and some very brilliant doctors here in this section who were able to find what the hell Mayo Clinic did to me and fix it up for me. So I was running on... on one leg for a period of time and then... 1974 I was in such bad physical situation that we talked it over with the people at... the board of directors...and I told them, "You know, I wanna stay here. I wanna have a proprietary position but I, to be honest with you, I can't run the company anymore. I don't have the physical capab..."It turns out, I can do it now because the surgeons here were able to fix me up. But I wasn't fixed until abut 1985.
So you became the vice-chairman of the board.
And Wilf Corrigan became...
Yeah, once he got in, that's why he's mad you see... Once he got in, he wouldn't... he wouldn't let me do anything, you see. It wasn't the way it was planned, OK?
Yes. You had probably, like Gordon Moore is today, I imagine you would want to be... you would have wanted to be in kind of that position... the senior statesman, the strategist...
That's exactly what I wanted...
And then have an Andy Grove run it on a... day-to-day kind of basis.
Exactly, that's what I asked for but my Andy Grove tried to get rid of me
And then over time, at Fairchild, the, you know, we went through the '74 recession, we never lost money in the '74 recession. And through '79 we finally had to back up to doing seven hundred million or so a year and making, you know, fifteen percent pre-tax profits. And then there was a hostile takeover from Gould, which, you know, I think you detailed in your book, and the, and I think at the time that hostile takeover started, the price was sixteen dollars a share and by the time we sold the company to Schlumberger, it was sixty-six dollars a share. So, certainly the shareholders made out okay and the, most of the managing people did okay on their stock options and so on.
But then after that, the Fairchild story was more or less over. But it's interesting to see that the remnants of the Fairchild it was is recently now spun up as a new company and again still doing five hundred million dollars a year
I would have to say my most exciting day in Silicon Valley was the day I showed up and my saddest day was the day Fairchild was no more.
What went wrong?
Well, you know, it really depends on when you think about it, if I'm a little cynical what I would say is that what went wrong is in 1967 Sherman Fairchild made John Carter president of Fairchild instead of Bob Noyce because if he had made Bob Noyce president of Fairchild, Fairchild would be Intel. Because Bob had a very clear vision of what he wanted to do and he was bound and determined to do it. And that would have been the best possible thing that could have happened to the company. But if you say okay that was a foregone conclusion all of that's, you know, water under the bridge. What happened in the 70's that led to this thing, I would say there were a couple of, two or three, decisions that in retrospect were probably big mistakes. One was getting into the consumer electronics business and making games and watches.
Of course that was one that we had all made.
I'm not blaming anyone. I mean we all made the mistake and we all got killed. But Fairchild was just precarious enough financially where it really hurt the company seriously and as a consequence we wound up under-investing in MOS technology at a time when MOS was taking over the world we were still riding on the strength of our bipolar technology which was probably the best in the world. Isoplanar bipolar was second to none and so we got caught in this famous trap of living off what we had done well but not really obsoleting ourselves with newer technology and so I finally got the task of trying to rebuild, you know, play catch up on MOS as you remember I became Group Vice President of the MOS group, but frankly it was pretty late in the day at that point.
There were a lot of bodies already. I was actually in that group and we would have a vice president every eighteen months come stumbling in...
That's right. I lasted a little bit longer than that.
They would always say we're going to run MOS like a business. And a lot of arm waving and all this stuff and then disaster. It turns out eighteen months isn't enough time to turn it around and so they'd be out and some new guy would come in. It was just terrible as a worker bee there. It was just awful. These guys... and they just kept getting worse and worse and worse. That's before you came so I can't include you in that.
Well we finally made a little money in the division, but it wasn't a whole lot. The problem was we just didn't have the capital equipment budget to really get caught up with the leading edge so we, you know, we were kind of bunting and stealing second base and doing all the crazy things you do to try to get by, but it wasn't a way to really build a strong enterprise. And another thing, I think we made one other mistake, too, and that was we went into the dynamic RAM business at a time when it was already well populated with a lot of other people and we probably wound up losing fifty million dollars, which in 1970 was a lot of money.
Of course again, everybody did that.
Everyone did that and so it was understandable why we did it, but timing is everything, right, so what you had was you had this disaster with the consumer electronics and right on the heels of that was this disaster with dynamic RAMs and suddenly we were just flat out of money and we were now a takeover target. And we got put into play by, you know, a hostile takeover and we wound up finding a white knight which was Schlumberger and that was the end of that story.
.Well the Schlumberger days, were you there during the Schlumberger takeover?
I was there in the early part, the early days. They had given us golden handcuffs, which meant I really wouldn't get the benefit of the buy out unless I stayed for a couple of years. So I just gritted my teeth and decided to stay and try to make a go of it. It was difficult.
What was the deal with Tom Roberts?
He didn't know anything about semiconductors. And I'm not sure he really cared to know anything about semiconductors. You know, he was caught up in the metaphor that the chip was the oil of the electronic era and, you know, Schlumberger knew how to mine the oil industry so maybe they could use some of the same things they did there to take advantage in the semiconductor industry.
It sounded great when eloquently presented, but the reality is that when you're running a business on a day to day basis, you've got to make a thousand microscopic decisions all
of which mean you have to have a very detailed knowledge of the business, none of which management had and management wasn't frankly interested in learning or taking advice from those of us who kind of knew the business.
And it just got worse. I mean everyone who was an observer, I know you were, just saw it get worse and worse and worse and finally I just threw up my hands and left Well there was also age discrimination issues, were there not? Weren't there people that were laid off because they were older?
I think that was true, yeah. I think you can go around and see a lot of the guys who at that point in their life were fifty, you know, fifty-ish plus or minus, and they found they didn't have a job, I mean whether it's Andy Procasini or any of the other guys, you and I both knew
And let me just tell you one little anecdote on that is the sort of the strange way life works is one of my patents was for the basic process about how you make a CCD and it turned out that that process was the way the whole world adopted making them. So henceforth and even to this day people still make CCDs the way I articulated at the time. So needless to say my patent was worth a lot. When Fairchild sort of fell apart it wound up going ultimately with Loral, you know, the East Coast part as opposed to the National Semiconductor part. And Loral realized when they purchased it that this patent may be worth a lot. Fairchild, because of all the turmoil, hadn't really pushed getting the license fees on this, but Loral being a little bit more diligent about trying to get value out of what they had bought discovered they had a patent that was probably worth billions of dollars! And so what they proceeded to do was go to Japan and tell every Japanese company, all of whom are now making CCDs, Sony and so forth, and basically saying “by the way, you owe us some money on royalties you haven't been paying”. And I think the average catch up fee on that was somewhere between two and three hundred million dollars per company. And so I got, needless to say this was litigated and so forth and I was involved in it, but anyhow the patent wound up being worth several BILLION dollars. If I owned that patent I would be as rich as Ross Perot, then I wouldn't even run for office!
Well things were going to hell in a handbasket, and we became a takeover target. And Schlumberger made the best offer and they fired Wilf on the first day. They got the... they hated him. Not because I told them.
Yeah. And then they installed Tom Roberts.
Yeah. Which is a mistake. I loved the guy, he was a nice guy but not... you know, what the hell did he know about all our business, you know. He didn't know anything about it. Now, his boss was a very bright guy and the trouble is--and I'm trying to remember his name, who was president of...
Rubai. Yeah. He died, you know, right around that period. Right, soon after they bought it. He died and they ended up finally with some first-class jerk, you know, who... only thing he knew about was oil wells and he thought anything else was a waste of time so the whole thing fell apart.
But by that time I had actually taken... I was gone, you know... got my pension and left.
And then came Schlumberger. Schlumberger to me killed Fairchild.
It killed it. Fairchild, up to the time Schlumberger came along back in '79, could credit, Wilf was right, it could credit about six hundred million dollars worth of business a year, which at that time was near the top. It wasn't the top by any means but it was pretty high up there, with only second to Motorola and TI, and then, of course some of the Japanese companies, but six hundred million dollars worth of business at that growth rate today would be multi-billion dollars.
But then came Schlumberger and everything changed. The main thing that changed what this old oil European-oriented, conservative atmosphere came in, I was called in personally by Tom Roberts and told that the first thing you're going have to do if you want to continue working at Fairchild, and you're reporting to me as president, is you're going to have to give up all this technology transfer work.
And I said well gee, Tom, you know, I can take orders like anybody, but Why? It's doing so well. We're getting bottom line results.
He said, at Schlumberger we do not transfer technology. The technology belongs to the company and it goes nowhere except staying in the company, and that's how we've gotten so big. And he says There's another thing. We live on loyalty. A person stays with the company because he's loyal to it and he gives his loyalty to the company. And if he starts to change jobs he's not a person you can trust because he's disloyal. And he looked me and he said you guys in the semiconductor industry are a bunch of immature kids. You have never really grown up. You will go across the street because somebody gives you a promise in the form of an option or pays you more money and you forget about loyalty to the company. He said that's the only way you can build a future by yourself, for yourself is to be loyal.
I said, well Tom, we're not living in that kind of a world. If we were living among the oil experts in France like Schlumberger and everybody was observing that kind of a thing, this is not our world. We're entrepreneurs, here. And every worker thinks he can be an entrepreneur even when he isn't. You have to keep them based on his work is fun and he gets adequate participation, and one of those things is to get options, stock sharing or something where you're part of the action. And across the street the guys going to offer it to them. When you can't, you're going to lose them.
And he lost guys immediately from Fairchild, including myself that, you know, left even on their own, weren't even asked to leave like so many others were. It was a totally different kind of a character. He reminded me a lot of Shockley, not as brilliant, very egotistical, you could hardly talk to the guy.
I remember Shelia and I went to a dinner at his house. He was fond of currying favor by inviting people to his house. He had a beautiful house up in the hills in, above Saratoga - Los Gatos , and as I came in I noticed he had on his mantle piece a beautiful Russian samovar. Now I have one, we have one in our dining room because I inherited it from my mother who inherited from her grandmother and never had much personal possessions, but she carried that samovar everywhere she went, this hot water cooker. And Tom had one. And I walked over and I said Tom, what a surprise to see a genuine Minsk samovar here. I could tell by the trademarks on it, by the engravings on it. And I meant it as a compliment. Well, he turned around and he said What's the matter? You don't think I'm wise enough or smart enough to know the value of a samovar?
You know, hey, Tom, hey, easy. I think it's a nice one. How'd you get it? And I just wanted to walk away from that subject, but he was that type of a person. When he was at the dinner table he dominated the conversation and he called on people like a professor calls on his class. And now Sello, do you have something to say? You know, and of course, I no shrinking violet so f you're asking me do I have something to say, that's an offense. Of course I have something to say. Sheila tells me I always have something to say, but that's not the point.
And he was that kind of an ego and he never really understood from the beginning what the culture was in the world that he was entering. And he thoroughly squelched all of that initiative, and the first thing that happened was within a month, a half dozen of the best guys who saw, you know, who could predict everything happening in business, they all left. Well, Wilf himself, for example, thought that an ideal way for Fairchild to continue under Schlumberger was, Wilf would still remain in charge. It would be like another start and Schlumberger would be the daddy with the deep pockets, serving on the board and all that sort of stuff, and Wilf thought for sure that he was going to be CEO. I'm sure he's glad that it didn't happen because he went on to do other bigger things, but that wasn't Schlumberger's way at all.
And then the Schlumberger people, they went on youth kick.
Far worse, yeah.
They, you know, get rid of everybody over a certain age and...
...bring in all the young...
...kids, yeah, who you can mold to your own standards and, of course, you know what that does. The one thing we lack in the semiconductor industry is good experience and that's the first thing they wanted to get rid of. You know, Schlumberger, if they would have treated Fairchild like a start-up, You guys, you got a business going here, you're not making a profit, you should make more profit, put it that way, and we'll let you run it, but you've go to tow the mark and here's what we'll finance, and all that sort of stuff, now you make it grow. And we'll give you growing money. I think it would have taken off.
Yeah, yeah. Roberts had this presentation where by the year, I don't know what it was, maybe it was 1995 or the year 2000, they were the only two semiconductor companies left, Fairchild and I believe the other was TI.
TI, Right. Yeah.
Well you know why TI...he's Texan
You know, forget Intel...
Roberts is a Texan.
And he's an ex-marine from Texas .
Yeah, but...you know...
I had to listen...
Forget Motorola. They're...
Oh, yeah. Those are Johnny-come-latelies.
They're gone because we had deeper pockets. It reminded me of the Vietnam
War, you know, we can win because we were...
We have more subs...
And we drop more bombs, well, you know, that doesn't work.
Doesn't work that way!
There was a third contract that you won't believe now. I happen to have the dubious honor of being one of the first guys into China on behalf of Fairchild during this period and that was in, about 1970. It was during the time that we were testing with the Tungsram contract about, we were carrying on, you know, discussion activities at various levels. That took a few years to develop, but actually by the time Schlumberger had come into place, I actually had the step, the letters of intent, I had the intent signatures for an operation in what was then the Silicon Valley of China in the province of Cheng-Chow in Hunan Province . We were all ready to go. We had the contract and it was going to be another one of these Tungsram type operations.
We had that.
What would, today...
I was so proud of that, Rob
Today that would have been worth...
Oh, and you know we...
We got the license!
You know, at TI, I thought Sheppard was a bully. I thought he tried to manage the thing from the top. He never let the management of the organization have enough time much less enough resources and latitude to run the business the way they thought to - thought they should. And it became one that just wasn't fun, you know. You know, with TI it wasn't ever really profitable either, so it's not profitable, it's not fun, and it's Dallas , Texas . What else do you need?
Who recruited you to Fairchild?
Mickey McCray, I guess. Is it Mickey McCray? Yeah, Mickey McCray was the headhunter. He got me with Tom Roberts. I had - I went there in '83 and I guess it had been like '80 they had come after me before.
And so Roberts, I got to know pretty good during the eighty time period. And he - I forgot who called who in '83 but anyway, I was kind of fed up and looking for something else to do. And so we got together then and from there I was introduced to Michelle Vio who was running the electronic part of Schlumberger then. And it was understood from the first that I would come in as Executive Vice President and that I'd move on to be President. I had to place my foot firmly and talk Tom Roberts back to get him out of there ultimately, but it took two years, but it - he did. He made a lot of changes - he and Schlumberger made a lot of changes that ultimately resulted in the demise of the company. What did you see when you got there?
Well first, if you think of Schlumberger as being the way it grew up and it became a successful company by farming small business units, which is usually a blue truck, a DEC computer and some kind of down-hole measuring equipment. And a Texas Aggie with a technician running around the southwest measuring things down hole. Then this guy's responsible for getting it done, getting the results back, getting the billings done, and everything else. I mean it was the most perfect decentralized unit you can imagine. And they tried to apply that to semiconductor industry. So the first thing I thought was that, you know, thirty-two different manufacturing areas on a five hundred thousand dollar a year business. It was just incredible. Everybody had their own fab, everybody had their own packaging, test, everybody had this, had that. And it was just grossly uneconomical.
And in contrast, the industry's gone to foundries, big fabs, you know, separate the business units from the manufacturing units, this kind of thing. And I spent all the time I was there trying to build big fabs and have high productivity areas like Japan , Nagasaki , Japan fab them and built them to Sony and shut down this inefficient stuff so that a wafer could be manufactured at reasonable cost.
The other thing I found was that I guess it hit me one night as I was contemplating what I was going to do, that probably more than half the people over there wanted me to fail because they'd just like for me to get out of their hair and go on do the nonproductive little things that they'd been doing for the last five or ten years and they weren't really interested in seeing the company profitable, upgraded, and so forth and so on. They just wanted their eight to five and get out of there. So I was convinced that I had to move people out of the company, out of some jobs, and I had to do it very quickly to ever get the right kind of people, the right attitude, the right centralization, the large capital intensive business, and to be able to find a way to attract the right design and application talent.
So as it was, from the time I took over president in '85 to... '87 we sold it to National, they just took too much - it took too much and too little time to really get it done. It was kind of interesting to see Fairchild come back public now. We sold it for two hundred thousand and it comes back for a billion-two.
Tom Roberts struck me as being awfully arrogant.
Yeah, I think - I don't think there's any question, and probably Tom would admit, to the success they had at Schlumberger and you have to remember he started - he was a West Point graduate, started out in sales at Schlumberger and at - at IBM, I'm sorry, moving to Schlumberger in the financial area and he became CFO. So, two things that are a little hard to understand is why there would be this arrogance, if you've come from an industry that's totally different than the one you're in - it would seem like you would be a little bit taken back
I think probably the demise of Fairchild is probably pretty well understood. You know, a lot of people had a lot of ideas because so much of the people in the industry came from Fairchild. I think what was probably more interesting to me about the Fairchild experience was the Fujitsu proposed merger. And to refresh your memory there, it became obvious to me, first as the Chairman Rebu died and then Vier took over as chairman of Schlumberger. And it was very obvious to me at a cocktail party one night, that we weren't long for this world. Fairchild was going to be sold and maybe all the electronics business that we were in was going to be sold. And with that in mind I went to try to figure out who to sell Fairchild to and, you know, I'd try to think about with General Motors and I said if you look at what products overlap between what General Motors buys and Fairchild makes is poor.
So I finally decided that the thing to do was to try to sell it to one of the Japanese because the Japanese had a need. And that need was they didn't understand the western market and on the other hand, they had good manufacturing capability and so forth and so on. So we put together the merger and basically the products would be marketed in the western world under the name Fairchild, in the Asian world under the name Fujitsu. We'd manufacture, at the, less cost for manufacture and we would design and market geographically. And so Fairchild would have an organization that would embody what was Fujitsu in California , in the United States , in Europe . And Fujitsu would do the same thing in Asia . And not to overdo this, it ended up we lost it because we could never get to the Justice Department. It was never denied, we got up to 18-wheelers worth of documents that had been sent there and they still had to make a decision and finally it just came unglued because people started to get nervous and all these things.
The claim was it was a military business.
Yeah, Cray computers.
Was that this would give Japanese control over these two primary areas.
Right, and the super computers, correct. They - the thing I find interesting about it is that the problem still exists with the Japanese companies today that we were trying to fix back then. And this was, you know, twelve years ago. I think Fujitsu, had we put that together and had we learned how to decide what R&D, which design, which products to take to market, what to do on and ASIC level in the U.S. versus the standard product, had we rationalized all those resources and put that together, I think we would have had the pattern for a Japanese company to be successful in the future. And I think that was the lost opportunity out of that, only to see it go to National where it's just - I thought it was a very poor decision on their part because they only put linear with linear and TTL with TTL, it didn't bring any value added to it.
How much did National pay?
As I remember, they only paid a hundred million cash. I had an LBO offer in at a hundred and eighty to two hundred, I can't remember, but there was a fifty million in paperback. But Schlumberger never accepted the LBO because, in my opinion, the board never wanted to be embarrassed, they wanted to get off the books,
If it would have been a success, it would have embarrassed them because they couldn't make it a success. If it had been a failure if they didn't collect the fifty million, it would have been an embarrassment because they would have to do- it's like two out of three in football you know, two interceptions, two out of three things are bad. It was kind of what happened.
Tell us about the Wagon Wheel.
Okay. The guys would go there after work and we'd work until seven o'clock or something like that, and we'd go up there and have a few beers. And there was always a huge crowd there. I mean you couldn't sit down. Everybody was standing up. And you know, the marketing guys like Jerry Sanders telling about the job he took away from TI, you know, down at Hughes, and the manufacturing guys talking about how they beat a yield problem and so on and so on. And it was, I mean, yeah, we were, there was drinking going on but a lot of business discussion and enthusiasm building and so on. It was really very positive. All marketing manufacturing at R&D was way the hell over, you know, than Stanford. A lot of interesting things happened. The women in the group, of course the wives... This was not particularly good for families at all. And there were a lot of family problems. I had a few myself, but this one day Jack McGarrian who was our materials manager is at the bar and he's sweet-talking this girl at the bar, and in walks his wife and all six kids, you know, chump clump, clump, clump!
They walk in and they go over to Jack and Jack turns around and he sees his wife and all his kids and he says, "Oh shit, Shirley." The place just broke up. And so, you know, funny. The other interesting thing about that is, you know, National in '86 bought Fairchild, what was left of Fairchild, which was a hell of a deal for us, actually. And we isolated everything that we didn't want, like the Whisman Plant, which the ground was contaminated. We just built a wall and kept us away from that.
But after we bought we had, you know, we're in the process of taking everything out that we wanted and I got a hold of Tom Bay and we took a walk through the old Whisman Road Plant, which is where we had grown up, really. And from there he said, "Well, we've done that. Now we got to stop at the Wagon Wheel." I hadn't been back in the Wagon Wheel since I left Fairchild, which was '67, so I hadn't been there for about twenty years. And we went in and there was no one there. It was completely empty except for one girl who was sitting there. And that girl used to work at Fairchild, and she worked at National and she was sitting there by herself having a beer, you know, and we just happened to run into her. It just struck me as strange as hell. She was sort of, I guess, reliving the old days.
But you're right that the discussion was almost entirely on business aspects...The only thing you talked about.
And there was a cross-pollination. When the Motorola guys came out, Hogan and his people from Motorola, they were shocked that this was going on. Not only the immoral activities with women but the trade secrets being bantered about and they issued an edict that you would not go. And I think productivity went down.
Absolutely. I mean many of the, by the way there wasn't a lot of immoral activity. There really wasn't. I mean I'm not a prude but there wasn't really much of that going on. But you know, you got a pretty girl it's easy to talk to. But I'm not aware of it going much further than that.
You know, if you have distinct organizations like manufacturing and marketing and R&D and what have you, you have conflicts between these. It's best to try to structure things as down to a lower level as possible. But in many ways you can't entirely and a lot of these problems were resolved at the Wagon Wheel. Really. I mean they would get argued out and thought out and I'm sure the beer helped that because a little bit of lubrication, you know, seems to help those things. And it was a very effective environment for dealing with it, and it was symptomatic of Fairchild. When we left Fairchild we never went back to Wagon Wheel. I don't know why. You know, it seems kind of strange but we didn't.
Well, you were now a spectator to Fairchild in the Hogan days and the Corrigan days. What was your view of what went wrong to the degree that you ended up buying your old company? But when Schlumberger took over it was hopeless because they knew nothing at all about the business. And they put a guy in there to run it who knew absolutely nothing about it but, you know, indicated to the world that he did know how to run a business and he was going to straighten out Silicon Valley, you know, by then it was called Silicon Valley. It was nonsense, truly nonsense. So it was sort of, you know, I think preordained that once all of the former management left and took all those people that it was tough for them to survive. And the only reason they lasted as long as they did is because of the huge amount of money that was flowing in from the Planar patents.
Well, and also from Schlumberger. They dumped a ton of money...
They sure did, that's right. They pumped a lot of money in.
And so, why did you buy them at National then?
For a number of reasons. One, we needed a plant expansion and they still had the Portland plant, which is still at the Fairchild facility now as a matter of fact, again. And very good facility, very great people there and what have you, we had that. We wanted that and also we wanted their discrete business. Our discrete business, we had squeezed it so much that was fairly, we were at the stage where we either had to drop it or do something significant to make it a significant business. And they had a big transistor and diode business, really big. So we paid a hundred and twenty-five million dollars for that thing, and we sold off real estate that got us more than a hundred and twenty-five million and right after we bought it. You know, we sold a plant in Korea and a plant in Brazil and one in Singapore and what have you, and we sold, what was their microprocessor? It was...
The Clipper. We sold the rights to that to this outfit in Florida .
Right. Yeah, so we got all hundred and twenty-five million back and we made the transistor and diode business a very nice little business. And then in, you know, it was '94 we sold that package back to the employees for five hundred million bucks and Fairchild's back in business again.
Curator for Science and Technology
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C. Lester Hogan
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