Interview with Mike Markkula

June 3, 2014

Transcript Ė Silicon Genesis at Stanford University Libraries

 

 

 

RB:†††† Hello.Iím Robert Blair chairing the Silicon Genesis program at Stanford University Library for the benefit of public research.Today, June the 3rd, 2014, we extend our audiovisual files to include the interview with Mike Markkula, a Silicon Valley icon.Armas Markkula, always known as Mike after his father, was born in Los Angeles of Finnish heritage.Mike earned his BS and MS degrees in electrical engineering at USC and entered the electronics industry via Hughes Aerospace.The invention of the transistor led to the integrated circuit which led Mike Markkula to Fairchild Semiconductor where he headed up IC marketing under then CEO Bob Noyce.Mike followed Noyce and Moore to Intel shortly after its founding and retired five years later in his early thirties, devoting time to mentoring early-stage companies and other personal interests.Chance introduction brought Mike together with two of the most famous entrepreneurs in Silicon Valley, Steve Jobs and Steve Wozniak.Discussions on personal computing quickly led to Mikeís being the first investor in Apple Computer where he took an equal founding share with the two Steves, investing eighty thousand dollars in equity and making a hundred and seventy thousand dollar loan to Apple.Mike served as the second CEO of Apple, and later as chairman and vice chairman, overseeing the arrival and departure of John Sculley, the departure and arrival back of Steve Jobs over a twenty year period.Following a second retirement in 1996, Mike focused on other personal ventures, both business and non-business.Today Mike lives in Woodside, California with his wife and has offered us the opportunity to hear his Silicon Genesis story for our records.Letís hear now from Mike Markkula in person.

 

RB:†††† So Mike, welcome to Silicon Genesis semiconductor archives at Stanford.Thank you for inviting us to your home today.Weíre going to focus on your career, primarily on the semiconductor part of your career.I know that your extended Apple career has been well covered by the Computer History Museum in a separate audiovisual, so we wonít cover all that ground again today.So going back to the beginning, you and I share some common things.Born in the same year, graduated in the same year.

 

MM:†† Yeah.

 

RB:†††† It seems like weíre both car guys, we both like guitars, and we both appreciate woodworking.So itís a pleasure to see you after what must be almost forty years that we havenít physically met.I remember my first visit to the Rusty Bucket in 1970, and as Linear Product Marketing Engineer from Fairchild Europe, and thatís where I think we first met.So glad to be here today.So briefly, Mike, obviously a Finnish heritage in your family with the name Markkula.Where did the name Mike come from, because that doesnít appear in any formal literature?

 

MM:†† Well, and it used to cause problems because people would write me checks to Mike Markkula and I had no I.D.[laughter]I couldnít cash a check.Anyway, my dad and my uncle grew up in Fort Bragg, California.And when they were teenagers, they gave each other nicknames.My dadís name was Armas.Thatís his first name and thatís my first name, A-R-M-A-S.And my dadís brother called my dad Mike, and it stuck.So that just became his nickname.And everyone knew my dad as Mike Markkula.And when I was born, I was Little Mike, and grew up with that name.[laughter]But it never was documented anyplace.Itís not on a birth certificate, Mike.Itís just a nickname that -

 

RB:†††† So did you get it put on your bank account just so you could cash checks, or [laughter] -

 

MM:†† No, I finally learned to get people write the check to A.C. or [laughter] -

 

RB:†††† Okay.Okay.

 

MM:†† - something else.[laughter]

 

RB:†††† So like both of us, we are descended from immigrants to the U.S.So where were you born, Mike, and who are your siblings, and what were your very early days?

 

MM:†† I was born right in the middle of Los Angeles at St. Vincentís Hospital.Iím fourth generation California.So I donít know how many generations you have to go through before youíre [laughter] - youíre not the son of immigrants, but - and the other side of my familyís mainly Welsh and Scottish and - and Irish, and with names like Williams and Thomas and so on.And that part of the family, or a good part of it, I - Iím told came around the Horn on one of those ships.And I do have pictures of my grandfather standing in front of the church in Los Angeles when it still had dirt street in front of it, two big doors and - and it was really a pueblo for a long time.[laughter]

 

RB:†††† Hm-mmm.You have brothers and sisters?

 

MM:†† I have one brother and thatísóthatís it.He lives on the East Coast, New Jersey.

 

RB:†††† Hm-mmm.Hm-mmm.So you went on after school to graduate in engineering.

 

MM:†† Right.

 

RB:†††† EE.So what took you into EE, Mike?And I know you were very interested in chemistry, but you settled on EE -

 

MM:†† Yeah, well -

 

RB:†††† - and went to USC.

 

MM:†† I had a chemistry set when I was a young boy.And a neighbor also had one.And there was an unfortunate accident that burned my brother seriously.So that was the end of the chemistry set, and that was really the end [laughter] of my pursuit of wanting to be a chemist.But fortunately, I had a physics teacher, physics professor in my senior year in high school who was dynamite.He would - he could explain all that complicated stuff and I got it - bang.And I really enjoyed that class.And as part of that class we had to do a term project, and so I chose to build a radio.And I went down to the trashcan behind the local radio repair shop and dug out a little radio [laughter] and took it home and took it totally apart, and got a big piece of plywood and painted it white, and drew the schematic of the radio on the plywood.And then Iíd take each part and put it on the plywood and wired it up like [laughter] the chematic - the schematic showed.And that was my project.The problem was when I turned it on, it didnít work.And it was a great learning experience [laughter] because thereís a little symbol that looks like an upside down pine tree, and thatís the ground symbol.And of course, the chassis of the radio was made out of metal and so it was a ground, but the plywood was just wood.[laughter]So I had no ground.So I had to run another wire all the way around everywhere where there was a - a ground symbol [laughter] and ground everything.And then it worked.

 

RB:†††† And it worked.

 

MM:†† It worked.Yeah.And that got me interested in electronics.I - I thought, boy, if I can do that, then -

 

RB:†††† Yeah, I think we all had some influential teachers at that age that made you love - love a subject or not.

 

MM:†† Well, I had great - I had some great teachers all through my educational experience that just stuck it - stuck out and got my juices flowing and made it easy for me to learn.And there were only a few, but they were enough.[laughter]

 

RB:†††† Right.Yeah.I had one, too.A guy called Turner - I remember him very well - in mathematics.And he just made the subject and it was great.

 

MM:†† Yeah.

 

RB:†††† So you had - you had multiple possibilities for university, Mike, and you landed at USC.Something stood out or drove you to USC?

 

MM:†† Well, a lot of it was, it was a private university that I - I could almost afford.I had to work and I had to borrow money from the government to go there.And I actually, for the first two years, went to Glendale College to - to save up the money so that I could go somewhere else.And I - I was originally accepted at Cal Tech and Harvey Mudd and some of those other places - but I just couldnít afford to go there.And I had an aunt who had worked at USC for many years, and so I kind of had a connection there.And I went down and interviewed and checked out.And I said yeah, this looked pretty good.And Iím really glad I did that.I think I got a great education from USC.And, gosh, I tell people that they really forced you to learn how to think.The engineering program at USC didnít just let you do things by rote, it - you had to learn how to think things through.And, boy, thatís been a lesson that been helpful all my life, you know.

 

RB:†††† Yeah.Weíll come back to that a little - little later.And, you know, I agree with you there.So after graduating then, I guess in í66 at USC, then youíre facing the world and a real job and -

 

MM:†† Well, I actually graduated in í64 -

 

RB:†††† í64.

 

MM:†† - with a Bachelors.

 

RB:†††† Okay.

 

MM:†† And then, at the time, I was already working at Hughes Aircraft.And, matter of fact, I was the youngest member of the technical staff they had ever had then.And I really loved working there.But they decided to put me on a Masterís Fellowship Program where you work part of the time and you - and you study part of the time.And so thatís how I got my masterís degree in í66 was on the Hughes Aircraft Masterís Fellowship Program.

 

RB:†††† Thatís interesting.In - in the U.K. at the time, I did the same thing.They call it a sandwich course, six months in industry and six months at college until you were done.And that was nice because industry paid for the - the college bit.

 

MM:†† Right.

 

RB:†††† So you just had to stay there for four years.So - so what did - what did you do at Hughes?Were - were semiconductors kind of jumping out at you at that time, or were you sort of more thinking system level?

 

MM:†† Well, part of the reason I went on for the masterís degree was I - I just got this bee in my bonnet that I wanted to know how transistors worked.And so [laughter] I took every course you could take in semiconductor physics and all that.They didnít really have a semiconductor physics line then.So I did computer sciences and semiconductor physics, and I ended up taking some circuit design courses from a guy by the name of Norm Robinson.And Norm was one of those standout teachers that I could just learn from him.He was so good.[laughter]And he worked at Hughes and he was getting his Ph.D., so heís the guy that kind of got me interviews and things and I ended up being able to work at Hughes.And, gosh, the quality of the technical people at Hughes were just wonderful.I - I had so much fun working there.And then the - I got into some other things at Hughes, in addition to my work on the different fire control systems.They asked me if I would run the - the stores. They had a place where all the engineers would go to get components for the latest and greatest things.And I said sure. So I ended up running the stores in addition to doing other things.And thatís how I met Jerry Sanders and Jack Gifford and [laughter], and all of the sales guys for Texas Instruments, and - and GME, and so on, [laughter] because they wanted to have their stuff in those stores so it would get designed in to the - the Hughes systems.And so - and I was very interested in all of that, and I tried as hard as I could to get the absolute cutting edge stuff in there, oftentimes samples that you - that werenít available to - to buy yet.But, you know, [laughter] that was the name of the game, to be ahead of all the competition.

 

RB:†††† Were these guys already trying to hire you at that time, or not yet?

 

MM:†† No, no.No.But they treated me very well, as you would expect, you know.And I never had time to go to lunch with them and all that other stuff, but [laughter] that certainly could have been part of it.

 

RB:†††† So after Hughes, Mike, you looked north to Silicon Valley.Before we get into some of the details there, what do you think in retrospect made Silicon Valley happen?You know, why did it happen here?Because itís never been replicated and a lot of people have tried.

 

MM:†† Well I - I think itís pretty clear.It was because Bill Shockley wanted to live here and he wanted to do his lab here.And that was the seed.There werenít the infrastructure things around then that grew up later.So that was the seed.And that seed attracted the traitorous eight, and that was the beginning of Silicon Valley.Then the way those folks conducted themselves in the following years is the reason that Silicon Valley grew here and continued to expand, first off by leaving Shockley.[laughter]You know, that was a whole different thing.And then by starting Fairchild to show that, you know, you can have one thing over here and something else over here and then somebody else can go over here.And then as Fairchild began to be successful, all of the supporting industries grew up.You know, you could get deionized water, for example.You could get silicon ingots.You - and you didnít have to do all that stuff yourself, you could - you could take advantage of the surrounding infrastructure.And then when you throw Stanford University into the mix you - you complete the - the stuff that you need, because then you have the technologists and the bright young folks who are going to be looking for jobs, [laughter] and you have the semiconductor industry which is right at the beginnings of its growth.

 

RB:†††† Yeah.Now, thatís really interesting.Letís just stay on Shockley Labs for just a second.I hadnít really paid much attention to that personally over the last twenty, thirty years.But 391 San Antonio Road is the address of the Shockley - Shockley Labs.And that building has gone through all sorts of cycles, from a food store to - you know.And now that whole complex is being redeveloped on a massive scale there.And luckily the developer has paid attention to the fact that it was Shockley Labsí address, and they are probably going to put a fairly large monument to the invention of the silicon transistor at that site.

 

MM:†† Thatís great.

 

RB:†††† And theyíre going to spend a couple of hundred thousand dollars, I understand, on that.Iíve been sort of one of the advisors for that.So hopefully by next year, that will be well identified as the beginning of Silicon Valley and the beginning of the - the transistor, as you say, the 2N697, I believe it is.So that will be recorded rather nicely with that, you know, pretty large and -

 

MM:†† Yeah.That will be super.

 

RB:†††† - and professional monument to the event.So Iím very pleased with that.So - so you moved to Fairchild after Hughes.

 

MM:†† Hm-mmm.

 

RB:†††† You got a couple of other offers, but you - you know, your buddies talked you into going to Fairchild and just before I went there.And both of us ended up in this product marketing role which, you know, for me at the time was, of course, brand new, and I think for the industry was a new function.And the semiconductor industry used that function very effectively.And, of course, you headed up that function at Fairchild.So just kind of tell us how you landed there and what you found and -

 

MM:†† Well, when I went there, I didnít - I didnít have the whole thing, I just was a PME in linear marketing.And Floyd Kvamme, by the way, was a director of integrated circuits marketing, if I remember correctly.And Floyd had a great influence on me, and he and I just really hit it off.And I loved working for Floyd, and - and in later years, as you know [laughter], Floyd came to work for me.So we didnít care who was the boss, we just enjoyed working together.And the most fun - Iíll just leave out a whole bunch of other little details - was that our little team was able to increase Fairchildís market share in linear circuits from under seventeen percent to well over thirty-five percent in just a couple of years.And it just happened that around that time - we were just paying attention to our thing - Bob and Gordon left to go start Intel, and all of the turmoil - turmoil came up.Floyd left and went to National along with Charlie Sporck.And we were the bright spot at Fairchild at that moment in time.[laughter]And so we were well thought of and they took good care of us.And I kept getting promoted and promoted until I ended up running all the integrated circuit marketing at Fairchild.And just about that time, there were so many other things going wrong at that company.I got a phone call and ended up moving over to Intel.

 

RB:†††† Hm.So you followed Bob and Gordon over there and -

 

MM:†† Right.

 

RB:†††† And like - like function, you were product marketing over at Intel as well.

 

MM:†† Right.Thatís right.

 

RB:†††† So interesting.Interesting.So how long did you stay at Intel, Mike?

 

MM:†† Four years.

 

RB:†††† Four years.Why did you - why did you leave?I mean Intel was on a pretty good curve at that point in time, right?I mean you could have been there for fourteen years surely.

 

MM:†† I could have.I could have.Well, and I think Iíve told this before, maybe at the Computer History Museum.But every year I used to sit down and figure out what my net worth was and just take stock of where I was in - in life, around Christmas time, as a matter of fact.And after Iíd been at Intel for two years, I came to the conclusion that I had enough money that I didnít have to go work for somebody.I could do what I wanted to do.And I said but Iím only thirty years old.[laughter]And - and I loved that job.It was really fun.You know, I loved doing the EEPROM.I loved doing the microprocessors and the semiconductor memory.I was in seventh heaven.It was - it was great.And - and a good combination of - of my technical abilities, along with some business planning and marketing sense.And it was fun, so I didnít want to quit. [laughter]And so I said Iím just going to start thinking about what would I do if I didnít do this job.And so I started making a list of things that I would do if I was retired.And two years later, I had fifty-two things on the list and came to the conclusion, why donít I just do that.You know, that sounds like a lot of fun, too.So I retired.And -

 

RB:†††† So they were probably not happy to see you go, Iím sure.

 

MM:†† [laughter] Well, theyóI donít know whether they were happy or not.I got - I got a great microphotograph of - of the 8080 [laughter] that I still have.

 

RB:†††† Okay.Okay.So here you are, then at thirty-two with, in theory, all the money you needed, and what are you going to do next, and a list of fifty-two items to choose from.

 

MM:†† Yeah.

 

RB:†††† So in the first twelve months out of Intel, what did you spend most of your time doing?

 

MM:†† Oh, boy.A whole lot of things.We were talking earlier - I had been playing guitar since I was a teenager and never learned how to read music.So one of the things on my list was (?) Iím going to learn how to read music.So I went down to the local music shop, which is long gone now, and I asked them if they had anybody that could teach me how to read music, [laughter] and they said, yeah.And so I did.I learned how to read music.I felt very fortunate and I did a couple of things.I thought along the lines of giving something back.And so one of them is I went down to the local grammar school and I said, hey, I have a masterís degree in - in computer science and semiconductor physics and Iím qualified to teach math.Would you like me to teach math?And they said yes.So I taught fourth grade math for a couple of years.And I went down to the city council and I said here I am, do you need, you know, a planning commissioner or a councilperson or any of these kind of things.They said, yeah, weíreóweíd like to have you sit on the planning commission.I said, okay.So I did that for a couple of years.And I thought that was going to be not a good experience, and it turned out to be a great experience.It was - it was not politically charged and it was real stuff.And we had piles of things to review for every meeting.[laughter]And so it was - it was a very rewarding experience as opposed to what I thought might be - turn into a political mess.So I did a lot of things like that.

 

RB:†††† So as a - as a technologist at the time, well-qualified with some real industrial hands-on experience, did you ever think of going back to university and teaching at university as a follow-on career or -

 

MM:†† Yeah.I - I did actually think about that.And I donít know why I never did it.I - I did a couple of classes at USC and at Stanford, where I just would go and take the place of like Ken Oshman or Bob Maxfield for one class and - and do a particular subject, and then I wouldnít have, you know, that to do once a week.[laughter]

 

RB:†††† So with all the excitement going on in the semiconductor industry, I mean the learning curve at that rate - you know, new ICs coming out and the technologies moving forward was - was pretty rampant.And you were sort of at the point of saying, well, enough of that; I want to do some other things.Was - was it easy for you to sort of divorce yourself somewhat from semiconductor detail progress and do these other things?Did you miss it?

 

MM:†† Actually not.I had so much fun doing some of the other things.

 

RB:†††† Fifty-two list was strong enough to -

 

MM:†† Yeah.The fifty-two list was - I - I never had a dull moment.And one of the - one of the things that I did do that wasnít on the list was - and one of the things that I missed was dealing with really smart, driven, young folks who were trying to start companies and do good things.And so I decided every Monday I would be a consultant.[laughter]And you could call me up and come and show me what you wanted to do and I would do the best I could to critique and - and help and - no charge.But donít call me on Tuesday because Iím going to be playing tennis or Iíll be skiing [laughter] or Iíll be doing [laughter] - building furniture in my garage or whatever, but Iím not going to be doing that.And so I did that for a couple of years until Apple started, and then I couldnít do it anymore, so -

 

RB:†††† So Apple, of course, is the next big milestone on your curve.And two of your good friends, Don Valentine and another asked you to go meet these guys, Steve Jobs and Wozniak, and see what you thought of their idea and whether you would like to help them or not -

 

MM:†† [laughter] Yeah, well, that -

 

RB:†††† - after being rejected by a couple of other folks.So tell us how that first meeting was.

 

MM:†† Well, it was Don Valentine.There wasnít anybody else involved.He just called me up and said I just met with these two guys in a garage in Los Altos.And he says youíre exactly what they need.[laughter]And so I - you know, thatís what I would - I was doing once a week, Monday.I - so Iíll - the next Monday I called them up and said can I come over and see what youíre doing.And -

 

RB:†††† What did you find when you got there?

 

MM:†† Oh, I - it was - I loved what Woz had done.You know, being a circuit designer at heart, and looking at the elegance of that design, and I could recognize how good it was.It was spectacularly good.And furthermore - I donít know - most people donít know it, but when I was running the marketing at Intel, I also had customer services and I had all the forecasting and all the shipping.And they didnít have even a handwritten backlog when I got there.So I ended up signing up with Timeshare and I literarily wrote the order processing system [laughter] on a Model 33 Teletype that was hooked up to a couple of PDP-11s on Bubb Road in - in Cupertino.And that was handy because I lived close to Bubb Road.I could stop and rebuild the disk drives on my way home.[laughter]And if there was a problem, it was convenient.So as part of that, I had a Model 33 Teletype in my study in my house [laughter] in Cupertino.And I wrote a whole bunch of little programs to balance my checkbook and to do other things that were like having my own PDP-11 [laughter] in my house.And so Iíd been doing that for quite a while so I - I could see - I could take what Woz had done and we could write some software for it.And wow, you know.To me it was a no-brainer.

 

RB:†††† So that first Woz design, as an IC designer, did you - were you seeing the latest and greatest ICs on that board, or was it just an efficient design?Or how would you characterize it?

 

MM:†† Oh, it was - it was - it was so clever and so correct.And there wasnít a - there wasnít a wasted bit anywhere.[laughter]And he used a 6502 because that was the cheapest microprocessor he could get his hands on, and - and he didnít want to spend a whole lot of money.And I mean he - it was ingenious what he had done.Putting slots on the board so we could - so you could plug peripherals in, and - and having enough power in the power supply to supply those peripherals.Woz had already written an Integer BASIC which was - was built in - in ROM.As far as I know, the Apple II was the worldís first single-board computer.(?) at least everything on the board except a keyboard.And, gosh, 4K [laughter] bytes of RAM.[laughter]Could you imagine 4K bytes of RAM?

 

RB:†††† So after this memorable first meeting and some discussions, Steve obviously invited and caused you to join Apple as Employee Number Three, I believe.Or (?) -

 

MM:†† No, no.No.There was a long period of time where my intent was to get them to write a business plan and then I would help.Iíd go raise some money and maybe Iíd buy a little stock.And that - that was as far as I was going to go.

 

RB:†††† Your intent in that time.

 

MM:†† But it became obvious that - that they just couldnít write a business plan, and they had no - no ability in the management part of things.And so I said, okay, Iíll write the business plan and then weíll see what to do after that.And in the process of writing the business plan, I concluded that we could build a Fortune 500 company in less than five years.And it just became so compelling.[laughter]I said, geez.But I didnít know anybody I could hire to do the marketing, and so I said, well, the only way that makes any sense is if I go do the marketing and then (?) do the rest of it by hiring some really great folks.And thatís how we got Mike Scott to join up as the first CEO.And so I was the Chairman of the Board and I was the Vice President of Marketing.[laughter]And so Scotty worked for me and I worked for him.That sent a whole lot of messages around to the - come on, guys, letís not pay much attention to that.And then eventually Floyd came - came to work there.Another guy by the name of Gene Carter - I donít know if you remember Gene.

 

RB:†††† Yes, I - I donít think Iíve met him, but know the name.

 

MM:†† Gene showed up in my office one day and said I want to come to work here.I said, you what?[laughter]Are you crazy?[laughter]He says, yeah, I want to do the sales.I thought, okay.How much do I have to pay?[laughter]

 

RB:†††† So this was a - a - a sort of a key shift in your career in term - as a - as a semiconductor guy.I mean here you are now with a vision in the systems business, and, you know, a one-board computer with integrated circuits on it, of course.But itís -

 

MM:†† Yeah.But itís - itís all semiconductors.

 

RB:†††† Itís all semiconductor driven.

 

MM:†† Sure.

 

RB:†††† And - but youíre out of the components business now and youíre in the systems business, and, you know, about to get back into it in a big way.So -

 

MM:†† Yeah.So I was a total failure at retiring.[laughter]

 

RB:†††† So - so that wasnít one of the fifty-two items on the list, I assume.

 

MM:†† It was not one of the fifty-two items.[laughter]

 

RB:†††† But it ended up maybe being one of the very biggest items on the list that you paid attention to over the next two decades.

 

MM:†† Yeah.

 

RB:†††† Yeah.Yeah.Interesting.So over that period, Mike, you know, for the first, letís say, ten years or so, looking out from Apple into the semiconductor world, what did you see and what was Appleís management attitude towards the outside semiconductor world that was - I mean there was a lot going on outside obviously, and now you were a customer of it.

 

MM:†† We all knew the semiconductor business inside out and backwards.We knew the problems of the - what we - the yield went down by a factor of two overnight and we canít get enough parts or - all of those things.So we knew how to deal with semiconductor manufacturers and - and we had a good reputation with them of if thereís a problem, letís just go solve it.Letís not get in all these harangues.The only issue that we really had is we hired a lot of people from all the Silicon Valley companies.And for example, Andy Grove got really ticked off at me because he thought I was over there trying to hire all his best engineers.[laughter]I said, Andy, theyíre coming over here.Iím not asking them.Iím not calling them up.[laughter]They want to come to work here.I - I canít stop them if they want to come to work.Anyway, so we had a lot of people from HP, from Intel, from National, from you name it.We had really good - good folks.

 

RB:†††† So knowing what you knew then, Mike, about the semiconductor industry, its strengths, its weaknesses, and so on, was there ever a serious appetite within Apple to do some semiconductor work in-house rather than just buying components from the outside?I mean like IBM had its own facility, and -

 

MM:†† Well, we did - we did some of that.The AIM processor, the - it - it stood for Apple, IBM, and Motorola. And it was designed really by the Apple guys and then improved upon by Motorola and IBM.And we used a PowerPC for, gosh, I donít know how many years, at least a decade.And we tried over and over to get in sync with Intelís design rhythm.But when they were ready to introduce a new microprocessor, we were just in the throes of putting whatever system was our latest into volume production.And I - the rhythm never - never lined - lined up.And it finally did when Steve came back and brought the - the NeXT operating system.So - and that would run on an Intel processor.So it - it was like, okay, now we have an opportunity to either - to choose both or do something different, and we did both.We - we - we went with an ARM design for some things and we went with an Intel processor for - for others.And I think it was the right choice, especially looking at what happened at Sun.

 

RB:†††† Hm-mmm.So - so Apple consciously chose not to go beyond the design into the manufacturing.I mean you never contemplated manufacturing chips.

 

MM:†† No.No.

 

RB:†††† Okay.Yeah.

 

MM:†† And we were pretty good about trying to multiple source things.So we (?) - you know, when we - when we were using the AIM chip, Motorola made them and IBM made them.But we were not - we were not hung out to dry if somebodyís yields tanked.

 

RB:†††† Yeah, well, that was always, of course, a - a major strategy at the semiconductor industry to have a second source.Some industries, of course, donít follow that general rule, but thatís always been -

 

MM:†† At least a second factory, [laughter] you know.

 

RB:†††† Yes. Yeah.Yeah.So you spent twenty years at Apple almost to the day or the month, I - I believe, in -

 

MM:†† Close, yeah.

 

RB:†††† Yeah, various roles, CEO, Vice Chairman, Chairman.So when you - when you finally departed from Apple to retire again, what was your thoughts at that point in time rather than, you know, twenty years earlier?So this is it?Enough technology?Or was something else catching your attention?

 

MM:†† Well, no.Thereís another company that - that Iím still on the board of called Echelon.And Echelon began with some ideas that I had that ended up getting patented in 1984, and started out to be a real company in 1988 when Ken Oshman came onboard to be the CEO.And we had some measured success.And the company main mission is to provide technology to do distributed intelligent control systems - again, semiconductors.And we developed a technology to do that.And part of what we did was we developed a chip that we call the neuron chip which is actually three microprocessors on a chip along with all of the analogue stuff that you need to interact over a network, and all the analogue stuff you need to see if something is on or off or in-between.So a neuron - itís kind of like a neuron in your brain.Itís - it - itís - itís a node in a network.And a network full of these nodes has a quite a bit of computing power and can - can control all the stuff that needs to be controlled in a factory or in a home or in a car or - you name it.The - the - the problem of control is the same.You need to sense whether somethingís on or off, and turn it on or off, and make it go in-between.So that company is still going.And we were a little too early again. Apple was a little early for the Apple market, and Echelon is early for their market.So we now today are just beginning to see explosive growth in whatís called the Internet of Things.And our technology is perfect for that.I mean thatís just exactly what it was designed to do and we solved a whole myriad of problems that - that others havenít even encountered yet.So - Iím really excited about that.And that was going on sort of when I was still a director at Apple.And during that time, I had wanted to leave many, many times, but it never seemed to be a good - a good time to go.There was always some kind of a crisis popping up and I didnít want to leave in the middle of a crisis.But in í96 things were coming back together and - and I thought, okay, I can get out of here.

 

RB:†††† Hm-mmm.One of the major changes in the semiconductor industry that I think some people saw coming and - but I think a lot didnít and a lot resisted, was the rise of the foundry, this concept of rather than a semiconductor company being vertical, you know, when we got in it, you know, you - Fairchild even grew its own ingots and packaged its own plastic transistors at the other end of the tube.The rise of the foundry I think was a profound change where people would just build wafers and they donít care whatís on the wafer.You got the designers designing, and - and the wafer guys building the wafers, and the customers buying the end product.Do you think that was good for the industry overall?And where do you think that will go next?

 

MM:†† Oh, yeah, I do.I think thatís great.

 

RB:†††† Obviously, you know, TSMC got it exactly right.

 

MM:†† Thatís right.

 

RB:†††† And, you know, Morris Chang & Company have done an outstanding job, of course, of making that divide and making it stick.

 

MM:†† Right.Yeah.No, I think it - I think itís very efficient and it requires significant CAD/CAM ability.And we have that.So I think - I think itís a win-win.The end customer gets more functionality and lower pricing.And, gosh, I - I heard the other day, I think thereís something like a hundred microprocessors in every new car.I donít know where they put them all, but -

 

RB:†††† Thereís a lot.I donít know what the number is these days.

 

MM:†† [laughter] I think - the thing is -

 

RB:†††† I mean it shocked me ten years ago when someone suggested there was ten in a BMW.I thought that was a big number then.But today itís, you know, way, way more than that.So -

 

MM:†† Yeah.

 

RB:†††† Now, the other interesting thing that Iíve seen and Iím - Iím sure you were part of it, Mike, is, you know, when - when - when things were sort of in the early stage, I always remember the consumer market being a bit of a dirty word in the semiconductor industry.You know, we - we - we all chased industrial computer military intellicom markets.And the ďconsumer marketĒ was kind of dangerous and not to be trusted, and not a very big market.And look today.

 

MM:†† Yeah.

 

RB:†††† Youíve got, you know, the handheld thing, and seven billion people out there wanting a handheld thing.Totally dependent on semiconductors.The military market today being, you know, a fraction of what it used to be is a percentage of the total.So, you know, very, very different pie chart today than, you know, thirty, forty years ago.

 

MM:†† Yeah.

 

RB:†††† So the consumer is as important, if not the most important market today for the survival of the semiconductor industry probably.Do you agree with that?

 

MM:†† Probably.I probably do.You know, I already have mentioned the Internet of Things.Thatís just starting.And - and thereís an Industrial Internet of Things and thereís a Consumer Internet of Things.And I - I think, like a lot of markets that weíve seen, you first had to have the profitability and the - a little higher value proposition in the industrial market to get the volume up so that you could build this stuff more inexpensively for the consumer market.And then you could build a consumer market.Well, I - I see that happening in the Industrial Internet of Things and then moving down into the Consumer Internet of Things.There is, you know, just a myriad of things that weíre able to do that we havenít done yet.One of the areas I think is going to be very interesting [laughter] in the medical arena is implantable devices with rechargeable batteries that donít require a connection, a - a wired connection.So you can - you can recharge your battery through your skin.[laughter]Transdermal.And, you know, theyíre - theyíve already started - I think they just approved a device that stops the tremors if you have Parkinsonís.And it - it works just like that.[talking over each other] -

 

RB:†††† Actually, I have a -

 

MM:†† (?) every - you have to go back every ten years and get a new battery.[laughter]

 

RB:†††† I have a member - member in the family with - who just had - had that operation recently.

 

MM:†† Really?Okay.

 

RB:†††† Yeah.And itís remarkable.Her ability to, you know, control the tremoring and so on with the -

 

MM:†† Yeah.

 

RB:†††† - with - with these implants in the brain.I mean amazing.

 

MM:†† Itís amazing.I have a good friend down at USC who just had his eye, his electronic eye, which is a brain implant [laughter] approved by the FDA.And he - it actually enables people who were born blind, who are completely blind, it - it enables them to see.And thereís all this kind of stuff that, gosh, just an infinite probability and possibility for - for growth.

 

RB:†††† Yeah.So one - one big question, of course, is - I donít think thereís any issue on, you know, the absolute importance of semiconductor chips going forward in existing markets getting larger, and as you say, new markets that are almost yet to be born.One big question, of course, is the length of Mooreís Lawís curve still to be run.You know, is physics getting in the way of cheaper and cheaper, cheaper chips?Or is it sort of actually facing a brick wall as some would like to believe?

 

MM:†† Itís always looked like it was a brick wall.It all - and - and - and all of a sudden somebody comes up with a new technology and the brick wall gets knocked down.[laughter]

 

RB:†††† So do you think the brick wall is virtual at this point in time?

 

MM:†† No.I donít - I donít think thereís a brick wall.I - I think weíre going to have quantum computers.I think weíre going to be doing nano this and nano that, be doing things on a molecular level.Every time I read Discover Magazine [laughter] Iím saying, wow, that sounds like [laughter] - itís pretty interesting.

 

RB:†††† So thereís a decade or two of innovation left to keep the curve going (?).

 

MM:†† Oh, easily.Easily.Easily.I donít see any end.

 

RB:†††† Yeah.

 

MM:†† I just read an article - well, it was just yesterday, that these guys in - I think theyíre in Denmark or Holland - one of those two places.And theyíve actually made a Qubit in one location affect a Qubit in another location with no connection whatsoever.[laughter]And - and itís instantaneous.Thereís no speed of light limitation.All of those other things go away.And the Qubit can have more than two - two stable states.[laughter]And so (?) - thatís all you need to build a computer.[laughter]And if it has no limit of - you know, we worried about how long does it take to get across the circuit board.[laughter]And - and, well, you can do this - (?) - the distance I think was three meters that they were able to - to do it.And Iím going, wow.Thatís amazing.

 

RB:†††† Another interesting phenomenon that weíve obviously seen, Mike, in our, you know, time and careers here is the - letís call it the change in the top ten.If you go back to, you know, the Ď70s and the Ď80s, who were the top ten semiconductor companies and who they are today, and whoís likely to be the top ten in the next five years.I mean very, very different list, with a couple of exceptions.I mean gone are the - you know, the Fairchilds and the TIs and the - some of the classic names that we all grew up with.And thereís a whole bunch of new names that, you know, were unknown in those days.You know, the Xilinxí, NVidias, Broadcom, Qualcomm.But thereís one name that sort of hangs in there, and thatís Intel.So I mean I think the software connection to the past, present and future of Intel has been a real source of strength for them to stay in that position.I mean an Intel chip wasnít just an Intel chip and a better Intel chip, it was an Intel chip based on software that was out there and couldnít be changed quickly.So the fact that itís, you know - the OS is out there has - has totally enabled them to maintain their position.Do you see that happening more and more as software becomes more prevalent today with some of these other companies, to hang in there based on software?

 

MM:†† No, I donít think - I donít think thatís going to be the answer.I think the model that I would look to is a company called Maxim.And, you - you know, Linear, right?

 

RB:†††† Yeah.Yeah.Maxim.

 

MM:†† So you know Maxim.

 

RB:†††† Yeah.

 

MM:†† Their whole idea is to keep coming up with new ideas and new applications and new chips that do new things, and talking to their customers about what improvements could be made to the chips they already make.And I - I think even Intelís going to have to have a much broader approach to - to the marketplace, and theyíre going to eventually have to get out from under - depending on Microsoft to do their OS.

 

RB:†††† Hmm.Your Maxim thing sort of goes back to the Fairchild days of - you know, your success was the application note, that three-ring binder that, you know, helped the customer design the product in.I mean that was a winning strategy that -

 

MM:†† Yeah.That - that worked like a bandit.But, you know, there are - there are some functions that just are - thatís what they are.And op-amp is an op-amp, and you - you - so youíll put four on a chip and build them for a penny.[laughter]It - youíre still not - youíre not going take an op-amp and build a bigger op-amp.Thatís not what you need.[laughter]

 

RB:†††† Right.

 

MM:†† And so you just have to make them as inexpensive as possible and make sure they perform.

 

RB:†††† So part of your Network of Things vision that, you know, you saw a little bit before its time maybe, but itís - itís here now, is -is just the improvements to wireless technology.You know, the Wireless Everything now.

 

MM:†† Wireless Everything.I love Wireless.

 

RB:†††† Itís - itís amazing.And that, of course, is a giant boost for the semiconductor and the component industry itself.I mean any phone, I mean just the - the - the mobility of everybody and everything is just a huge boost for the semiconductor industry and - so that technologyís moving very quickly.So what about your other activities outside semiconductors, Mike, now that youíve sort of - you - you - you grew up with the semiconductor explosion, you grew up with the personal computer explosion, both from the inside, youíve had some very important endeavors outside of both of those industries for personal reasons, your applied ethics activities at Santa Clara, the Jet Center, of course, Echelon.So - so is there anything else that you are thinking of, or are you sort of turning to the golf course now?

 

MM:†† Unless something just - that really flips my switch comes along, Iím going to try and stay away from new investments in - in start-ups.Itís - to me, I canít just put money in something; I have to get involved.And thatís the kiss of death [laughter] because it just - I just gets to the point that you donít have any time to do other things that you would like to do.And I - I think itís time -

 

RB:†††† Four-year projects turn into twenty years.

 

MM:†† Yeah.And I think itís just time for me to - to do those things that I didnít get to in my original list.[laughter]

 

RB:†††† Yeah.You know, for those of us that grew up with the semiconductor industry and - and obviously recognized how important it was and still is in today's world, I start to worry about the lack of people being interested in semiconductors per we at the semi - at the chip level, and, you know, being more interested at - at the app level and the software level and the system level and just taking silicon for granted.How do you see that?

 

MM:†† It still requires someone to design the end-user equipment whatever it is, whether itís a car or a computer or a phone, somebody has to design that stuff.So if you take your iPhone, there are a bunch of engineers that figured out how to put all that stuff together on that little circuit board and make it do all the things the iPhone does. Same thing with a car, same thing with the - your air conditioning system at home.Itís just somebody has to have that knowledge someplace to put that stuff together.And I think thatís always going to be the case.Thereís - you know, the - the components that youíre able to put together might get more sophisticated so that you could do - you could do more complicated things with fewer parts.And thatíll continue.So that you - instead of designing your own computer, you can buy a CPU on a chip.Good.All right.One step we donít have to do anymore.And we used to use slide rules.[laughter]

 

RB:†††† I remember them well.

 

MM:†† [laughter] And we used to use HP calculators.We donít do any of that anymore.

 

RB:†††† What are your sort of predictions, Mike, for the semiconductor industry over the next decade or so on things like, you know, cost applications?Do you think it continue to be (?) -

 

MM:†† Well, I think weíve talked - I think weíve talked about -

 

RB:†††† - strategic national interest industry?

 

MM:†† No, I think weíve talked about the things that I - that I think weíre guaranteed of seeing.Quantum computing of some form or another is going to make orders and orders of magnitude.Not just one order of magnitude, but orders of magnitude difference in - in the kind of calculations we can make, and the understanding of the cosmos we can have, and figuring out whether the Big Bang really ever happened, and if it did I - and all of that stuff requires more computing power than we really have today.And I think I see the light at the end of the tunnel for that.The Internet of Things, I really think the quality of life can be improved by having smart devices in a hotel room, in your house, in your car, whatever, all networked together in such a way that if one of them fails, the whole system just keeps right on working and tells you, oh, hey, Charlie over here failed.You know, we got to - we need to replace that.And I think wearable devices, [laughter] and implantable devices, and prosthetics, and robotic appliances, all of that stuff just starts getting more and more affordable and reasonable, and the overall quality of life goes up.

 

RB:†††† Great.Good.Well, Mike, I wish you luck with staying out of all of these startups that are around you all the time and congratulate you on your career.Outstanding job youíve done for the industry and, of course, for Apple.And try to enjoy your retirement finally.[laughter]

 

MM:†† Yeah.

 

RB:†††† And thank you very much for inviting us and allowing us to do this interview for Silicon Genesis, and it will be posted on the Stanford archives shortly.

 

MM:†† Good.

 

RB:†††† So, Mike, thanks very much.

 

MM:†† Thanks for coming.

 

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