Charlie Sporck was the first serious manufacturing guy at Fairchild. He was there as the planar process was developed, along with the manufacturing equipment and organization that defined Silicon Valley. Then he became a defining figure at National Semiconductor. As the Sam Walton of semiconductors, he instituted a no-nonsense entrepreneurial vision of silicon suppliers. He offers his insights on the successes and failures of Fairchild to National as well as the aborted moves into consumer electronics.
RW: So Charlie, tell me about your early days and where you went to school and so on.
CS: Okay. I'm from a little town called Saranac Lake in upstate New York and I went to school in New York State, Cornell University, mechanical engineering, even though I never really worked at mechanical engineering. After graduating I went to work for General Electric. Actually, I had a number of assignments. I was a co-op student during the Cornell years and each three months I'd get a different assignment, whether it's testing B-36 gun turrets, if you remember that was the first gun turret that the gunner didn't sit in the turret, they handled electronic gear and jet engines and the torpedoes. Sounds like the only thing GE did in those days was build war equipment, you know, but water coolers and so on. Anyway, then when I graduated I went into a manufacturing training program where I got sent around various different plants building material, different equipment, different jobs, you know, whether it's production or materials, management or foremanship or whatever. GE at those days was an outstanding manufacturing organization. They no longer are, they're primarily a bank now. And I ended up at GE, an operation of their power factor correction capacitors. It's the big, big stuff, you know, that you see hanging on telephone poles and power poles. And in total I worked some nine years at GE and really in a strange way the reason I got into the semiconductor business is because of General Electric. It turns out, if you don't mind my telling a side story on this...
RW: Go ahead.
CS: It turns out that the last assignment I had at GE was a job called a Supervisor of Shop Operations, which I had the production people as well as methodology people working for me. And in those days, you know, GE was very strongly unionized in that particular place and in the capacity department by the UEW, United Electrical Workers, which was an outfit that was suspected of being communistic in those days. Anyway, the contract was written such that in order for you to change the price in any way in terms of building a product, you know, the labor price per part, you had to significantly change the method. So I had worked something like a year and a half to two years coming up with a new method to assemble these power factor capacitors, and when we started to install it the union started to object to this because they recognized that it was going to represent a change in price. And there was a fight for some time. And actually it was a very friendly fight because I had a very good relationship with the guys. However, the company chose to back down, so there was two years of work went down the drain. 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. So GE is basically the reason why I ended up in the semiconductor business.
RW: Well, Silicon Valley has a visceral dislike of unions.
CS: We have been very successful in keeping unions out. As a matter of fact, there's only been a couple real threats, one in the early days at Fairchild at the diode plant. There was a real threat and we actually had an election. It turned out that we were fortunate that we found that the business manager at the local that was trying to unionize the plant up there was making more money than Bob Noyce was making as a general manager of the company, and we spread that around like crazy and we won big there. And then there was one other election that had happened at Raytheon at later years. But other than that there has been no progress by the unions.
RW: And do you think that's part of the success of Silicon Valley?
CS: Very definitely. You know, a lot of us came from the East Coast and worked in conventional companies. You know, Bob Noyce worked at Philco, very unionized. I worked at GE, heavily unionized. We had experience in those environments where there was a restriction on your ability to be flexible. I worked for a short time in the steam power plant of GE, a steam turbine plant rather of GE, and the chief shop steward could walk in and turn the main power off and just shut the whole place down and go into discussions. I mean it was an entirely different environment. Now you can imagine somebody turning the power off in a semiconductor wafer fab facility. Actually, there's another interesting story that relates to the kind of atmosphere that existed in the semiconductor business at the beginning, and that is how I interviewed at Fairchild. And it turns out that 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 in this hotel, 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 the 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.
RW: Well, the founders were all scientists, were they not at Fairchild?
CS: 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.
RW: So how was this resolved?
CS: 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.
RW: So were you really one of the first of the semiconductor of manufacturing people?
CS: 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, excuse me, when the company needed manufacturing capability, and there was no one else around who really had extensive manufacturing background.
RW: And there was no semiconductor equipment sector in those days.
CS: 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, Nick 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.
RW: In a way it's kind of a model of a modern start-up where, you know, Internet speed...
RW: ...because industry wasn't that way. American industry was no that way, it's not...
CS: 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.
RW: And a nice guy, too.
CS: 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.
RW: Well anyway, so what happened at Fairchild? Did you build up the capacity and the production?
CS: 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. And some of the processes were, you know, bad idea. I remember the worst process we had was creating a mesa. You know, this was a mesa transistor, before planar. And you had this, you know, you diffused the silicon and then you mesa'ed the emitter, and that was the messiest damn job. They used, well, toward the end of that step they had developed a metal mass that you'd lay a line on the wafer and the metal mass would protect the emitter and then allowed you to get carnuba wax down, I'm sorry, carnuba wax on the emitter but it would expose the mesa portion, and that was a nightmare to get this stuff. I don't really know if you've ever dealt with carnuba wax, it's like glue, you know, it's awful stuff. And they'd put the carnuba wax on and then etch away the silicon to create the mesas. That was an automated step going to the metal mass. Prior to that they'd have to take like a nose dropper, you know, and drop the heated carnuba wax on top of the emitters in order to protect the emitters when they etched. It turns out that the guy who had the most talent in doing that was Jay Last. He's a, you know, Doctor of Physics, so here is this guy who is a Ph.D. in Physics and he had the job of dropping the carnuba wax on the tops of the emitters. 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 CALL and integrated circuits.
RW: Like the integrated circuit, yes.
CS: 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.
RW: Well, did you also go to Shiprock, New Mexico to the Indian reservation?
CS: Yeah, that's not one of the...
RW: I noticed you didn't bring that up.
CS: No, we did, that was at the, just about the time we went to Portland, Oregon or 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, we had a very major negative impact upon the Navajo tribe.
RW: So the planar process was pretty fundamental then.
CS: Oh, it was a tremendous breakthrough. You know, there were so many difficulties with that exposed junction. I've already just talked about the mesa'ing process and the difficulty we had. That created a lot of yield problems. In those days they sealed a chip in a metal package, a metal header. You know, they had a metal header with glass insulators for the terminals coming out and then they put a metal cap on that and welded it and frequently you'd get metal flash inside, and of course that flash would bounce around and landed on the junction. You had a defective device. And we went through all sorts of crazy stuff, like we'd take all of the devices a hundred percent and rattle them while you were watching a scope to see whether anything would land on the junction. But once you had the planar process that was all gone. And then obviously the biggest thing is when Jean sat down with Bob Noyce and described this and the results of it because he'd actually run devices so he had proof, and Bob looked at this and he said, "Integrated circuits." Now I'm taking big liberties there. I don't know whether it exactly happened that way.
RW: Well, same meeting.
CS: I liked to believe it happened that way.
RW: The same meeting with the lawyers to work on the patent applications.
RW: And so then Bob got the integrated circuit patent and not Hoerni.
CS: That's right. Oh yeah. Well it was his idea, but it was the planar process that's what made it possible. And I, frankly, that was a real integrated circuit. The fact of the matter is TI, that was a hybrid. I mean it was not "integrated" to me but it was, you know, a patent was granted to both.
RW: Well, the planar patent was a cash cow for Fairchild for many years.
CS: Oh boy. Yeah. It allowed Fairchild to continue for years and years and years, yeah. Without that huge flow of money it would have been under eventually.
RW: And when the patent ran out Fairchild kind of ran out.
CS: Ran you, right. Of course, they were running out before that actually, no, that's true.
RW: Well, it was masking the cash flow issues.
CS: Yes. Because you're talking about huge amounts of money, especially from the Japanese.
RW: Well, so what more about your career at Fairchild?
CS: Well, I guess I learned a number of things there but I learned a hell of a lot. I came there knowing absolutely nothing about semiconductors. But a lot about how a high tech company should operate, you know. Probably the biggest problem we had at Fairchild was the transfer of technology from R and D to the factory. It turned out to be a nightmare for us, and there's a whole bunch of reasons, you know. One is we didn't have enough talent in the factory probably. The product probably not being completely brought to a transfer level prior to transfer. The discontinuity that frequently happened, you know, that the guys who had developed in the lab passed it off to the factory and went back to do something else where as the people in the factory were not qualified in many ways to pick it up, and additionally, maybe in some cases not emotionally motivated to pick it up which was, you know, my responsibility because I had become general manager of the total operation, both R and D and the whole semiconductor operation and I did not solve that problem. I can remember having numerous conversations with Gordon about this. It's one of the reasons why we brought Pierre La Monde down into the factory is to try to bring more talent into the factory to adjust that issue. In any case, we never solved it until after we left. And if you look at the companies now there are very few companies that separate R and D from the factory. You do the development work right there and you don't go through this silly transfer.
RW: Certainly Intel and National, that was...
RW:...what started the credo.
CS: Oh yeah. Definitely, when they started this thing. What they do now, I don't know any more but we had basically solved the problem at these newer companies by just eliminating it. There's that issue, the transfer issue, and how you set up R and D was something that was very important to us as a lesson. The other issue that impressed the heck out of me was the numbers of people leaving to set up companies. I mean it started, the first one was, you know, Raytheon, which, actually was this boiler company before Raytheon bought them out. Can't remember the name of them any more. You know, our general manager had left and started a company just a block away. I can't remember the name of it. What was fortunate is they left just before the planar process was invented, so they went over there with a mesa and they got cremated by the planar. And then of course there was Amelco, where, and then Very serious people started leaving, like Jay Last and Gene Kleiner and Jean Hoerni left, Amelco. That was a big shake-up for all of us. And then a bunch of guys left from the lab to form Signetics. And then another group formed GME and we had to sit back and say holy mackerel, you know, can fifty thousand Frenchman be wrong here? And starting, and a lot, you look at, you know, why? And of course it's easy to assume that maybe you could have done something about it. At this stage I question whether you could, but certainly the East Coast, you know, the Fairchild Camera Instrument, the corporate office was back in Illinois, and these people were conventional thinking people in terms of classic kind of East Coast industry. They never could understand why we needed so many of these stock options, you know, and dragged their feet on that. They did not want us to give options down to working engineers. I mean these guys are supposed to be laborers and they're not supposed to be participating in the success of the company and then they also, and not all of them. I think Dick Hodgeson was, you know, understood that to a certain extent, but the guy who was on top, John Carter, I mean he didn't at all and that caused some difficulty inside Semiconductor out here. Secondly, they kept taking the money that we were generating and investing it in crazy things. Can you imagine in the mid '60s buying Dupont, Dumont rather, Dumont scopes and tubes? I mean it's like deciding to, you know, manufacture microprocessors in competition with Intel today. I mean it was a done deal. It was all over. Anyways, that bothered a lot of us that all this money was going into these crazy investments and we were being starved for cash to expand and what have you. So a number of us, including myself, starting thinking about hey, you know, all of these guys going off and starting these companies, you know, it's not all bad. And Pierre Lamond actually came back from a trip in Europe and he had run across the guy who was in charge of R and D for Plessey in England. And this guy who's name again I can't remember at this stage was telling Pierre, he says, "You know, boy what this company needs is all sorts of talent." meaning Plessey. "What we need is some management." So Pierre comes back and gets a hold of me and says, "You know, we ought to try to strike up some kind of deal with Plessey and, you know, start our own company," and what have you. And that's how I got started. It turned out that we went down the road quite a ways with Plessey, but at the end the deal was already to be established, you know. We were going to set up the headquarters over here and a facility over here in the Bay Area. And the plants and R and D in Plessey in England was going to be combined for this and that we would get paid off in some structured, you know, system of calculating the success of it. The last weekend before this was to happen I get a call from Sir John Clark, who had been knighted, you know, because he had bought Alloys Unlimited, you probably wouldn't remember that but there was an outfit in the United States that made these little gold preforms that you die-attached chips down on and gold wire and a whole bunch of other stuff that was initially very successful, and Plessey had bought them. Right after they bought them Alloys Unlimited went into a tank. Anyway, he got a knighthood because of that. The first time an English company had gone and bought a hi-tech company in the United States. Anyway, just before we sign I get this call from John Clark saying there's a group of experts coming over to interview us because the Plessey board wants to know more about us. This Friday night we arrange a dinner meeting with these guys, and there's about five of them. And we're, you know, having a couple of cocktails and standing around and we sit down for dinner like around seven o'clock, and I had made a deal to take my family skiing that night, late, you know, go up to Tahoe. So I wanted things to wrap around. The first guy looks at us and says, "Now, would you people tell us what a semiconductor is?" We all looked around at each other and Roger Smullen who was one of the group, stands up and he throws his napkin on the table and he walks out. He didn't say word. And I looked at Pierre and Fred Bailek, and Fred is the world's greatest negotiator, so I say, "Fred, you talk to these guys." And I got up and Pierre got up and we left. And we went skiing. And Fred talked to them until around three in the morning, drove them into the mud. Monday when I came back I called John up and I said, "This ain't going to work." And because of that we had a soul-searching meeting and decided that what we really ought to do is take over a company, an existing company because most of our talents were manufacturing talents. Once you say that then it leads you to companies that are not successful because you don't take over a successful company. And we started to focus on National. You know, National was doing about seven million dollars in sales and losing their backside on it, although they were building inventory to hide it. And there's a fellow here whose a venture capitalist, Don Lucas, who's a very capable guy, he happened to be on their board and I went over and talked to him and in a couple of weeks I was the CEO of National and this large group came over from Fairchild to take over the company entirely.
RW: So who came up with the money?
CS: You know, we did have an offering. But you understand we were taking over the company, we didn't buy it. They just made us, I mean they just gave us control to run the whole thing. Actually, you know, we made out as the stock went from, it was selling for around five dollars a share and the end of that weekend, the first part of the week it was over twenty. It was just skyrocketing. And although we were losing money one week after we joined we went to Danbury, Connecticut, which is where the bulk of the people were. We had employees around six hundred people, we reduced the headcount down to three hundred that first week. It was profitable already. And then frankly we just squeezed the transistor business to finance the linear circuit business, which was out here. And we had a good fortune of having Bob Widlar, you know, as the designer was at that time the world's greatest, probably the only really successful linear designer at the time. And it just took off from there. We did go to the well to get money very early in the game there, which it turned out to be very easy to do. But the stock was already public at that time.
RW: Well, it seems to me that you brought a different culture to National, different at least from the main Fairchild culture. It was simplistic...
CS: Yeah, there were some differences. At Fairchild, you know, the things were in many ways conventional. We all had offices with doors on them. I always hated that. When we went to National we eliminated all offices. It's just only open environments. But that was not new here. HP had done that. I have to say, HP started that and it's worked very well for, you know, HP. It creates a much more informal environment, an environment where people feel very comfortable, you know, just walking and talking to each other or talking to the boss what have you, which I think is very important in our business.
RW: Yeah, communication.
CS: Very much so.
RW: It promotes, everybody knows what's going on.
CS: Yeah. And it's hard to be mad at the boss if you can talk with him. I mean strangers are people you get normally angry with.
RW: Well, didn't you also drive a pick-up truck?
CS: Oh yeah. You know, my background is my father was a cab driver. He was a machinist who got tuberculosis back, you know, these are back in the days in New York City, large percentage of the people got TB. And in 1918 he came up to Saranac Lake. Saranac Lake is like the miracle mountain, you know, in Switzerland, Davos, where people went to cure TB. And we didn't have, you know, any money at all. My mother, in fact, had taken in laundry because my father couldn't work. He was curing. So I never developed any, you know, interest in having stuff, never seemed to be right. I felt very self-conscious about that, and a truck was very a great feeling to me.
RW: Well, it did okay for Sam Walton.
CS: Yeah, that's right. Well, Sam, yeah.
RW: So were you the semiconductor Sam Walton?
CS: No, I never made the kind of money Sam Walton made. But I view myself as somebody who's, you know, I'm more blue collar than I am. I'm certainly not a scientist type at all, and not somebody who finds, you know, expenditure of money in frivolous ways the least bit attractive. My wife takes care of that stuff.
RW: Well, at National did you have a lot of stock options for the year?
CS: Yes. National, we started right off at the beginning giving stock options to everybody. Actually, even to many of the longer service people on the assembly lines. Later, of course, it was just the engineers and... Yet, you know, these things never truly solved the problem. You go back at Fairchild for example, there were conversations, we've at various times we've had conversations with some of the old timers there that God, wouldn't it have been great if we'd been able to keep all of these people together at Fairchild. We'd have owned the world. But it wouldn't have been possible. People have such a desire to go do their own thing. And that's the reason I left, really, because I mean I worked for the greatest guy in the world to work for is Bob Noyce. At the time he was a VP there, but we couldn't have done it so.
CS: But we started broadly using options.
RW: It didn't seem to me that as, my background is design engineering, and it seemed to me that the process guys got all the glory at Fairchild and that design engineers weren't seen as being very valuable.
RW: In contrast to National and AMD that created an environment that was very friendly to design engineering.
CS: But I think, Rob, that was because of the timing. I think when you go back to the Fairchild period when I was there and probably when you were there, processes were incredible. If you didn't have processes you got nothing. And most of the products were very standardized and IC's had just started. And, I mean, design engineering didn't mean a damn thing in transistors, you know, or diodes. It wasn't until you got IC's that it started to make sense. And then when Jerry went to AMD and I went to National it became very obvious that the whole ballgame was design and we didn't recognize that all instantly, but you know, in just a few years you start to recognize like today the ballgame is thoroughly design. As a matter of fact, most of these companies don't even have fabs anymore.
CS: But that was a timing issue more than...
RW: Yeah. Yeah, you can kind of buy the process now.
CS: Yes. Buy somebody else to build the product because it's the product is, I mean the process is stabilized you know what you're doing, what have you. I mean, you know, we started in those days where, you know, you put in four tires and a chassis in a body and out comes a car. It's not that our business wasn't like that. You put all this stuff in and maybe something came out.
RW: Now, you left before Intel started.
CS: I left about a year before Bob Noyce and Gordon Moore and Andy left, yeah. When I left Bob was Group Vice President of all electronics operations for the corporation. And he had to make a decision for somebody to replace me. I think he should have picked Gordon. I don't think Gordon wanted it, but he didn't, he picked Tom Bay. And Tom's a super guy. He's, you know, my best friend in many ways, but they really needed somebody who could rally the people in the organization and Tom was looked at as sort of a marketing guy and in those days, you know, marketing wasn't as recognized as being as positive and as critical as it is today. So I mean they just, Fairchild was just open for rape all the time. Anybody who wanted you could get out of Fairchild and I mention this to Wilf and he gets very annoyed because he likes to feel that there were a lot of good people still there but we really raped Fairchild, and so did AMD and Intel.
RW: And Intel.
CS: Oh yeah.
RW: Yeah. Andy Grove once made the statement the 11-01 which was the first Intel product...
CS: I remember.
RW: ...a bipolar 256 bit RAM and...
CS: And 64, their first one was a 64 11-01.
RW: Well, anyway, he once made the statement that this shows that we can transfer technology from Mountain View, I'm sorry, from Palo Alto to Mountain View in less than a year.
CS: That bastard.
RW: ...and of course it was Fairchild R and D...
CS: I know.
RW: ...transferring the Schockley
CS: I knew what you were about to say there, right.
RW: ...process to Intel and Mountain View.
CS: That was quite a clash, you know, between R and D and the factory at Fairchild. And they, you know, Gordon, it still annoys him and Andy too.
RW: I know it seems, when Intel goes after anyone now that, you know, who has thought to have taken any trade secrets with them and it always kind of, I find that amusing that the guys that benefited along with National and AMD probably the most from that, taking the technology with them...
RW: And now have become holier than thou.
CS: Yeah. Well, that's the way it goes, you know. It's kind of silly in many ways. I mean, how do you take the know-how out of the guy's brain? You know, all you can do is make sure he doesn't bring paper.
CS: The guys would go there.
RW: Tell us about the Wagon Wheel.
CS: 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 chump chump chump. 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.
RW: But you're right that the discussion was almost entirely on business aspects...
CS: The only thing you talked about.
RW: 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.
CS: Sure. 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 and 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. Again, I think it was probably because we felt out of place going back there.
RW: Well, you mentioned Bob Wildar as the premier linear design guy.
CS: He started it all, really.
RW: He started at Fairchild, right?
RW: Now did you recruit him over to National?
CS: No, he was already at National. It was kind of interesting. A lot of people always say well, you know, the reason you went to National was because Widlar and Dave Talbert were there. Dave Talbert was the process guy. But it's not true. That was a big bonus because he was a very prolific designer. I mean he really got linear circuits going. And you know, he brought Fairchild to the top of the largest market share in linear. He brought National to the top of the largest market share in linear, just a very prolific guy. A very, very strange guy, but talent out the eyeballs and he would design a product, he'd not only design it, it would be thoroughly designed. I mean no flaws in this design. He'd write the data sheet perfect in all respects. The English was perfect. Application notes, extensive and thorough. And it would drive you nuts because he wouldn't allow you to introduce the product until everything was perfect. But this man could work, you know, on a device for, you know, three or four months, sort of night and day until it was finished and then he would go on a drunk. He drank excessively, which I tolerated. I had no choice. I mean this guy was the company for a while. I remember we had a seminar in Paris and we had around twelve hundred engineers from all over Paris and Belgium and all over France into this seminar. And Bob was talking. He was introducing the LM309, you know, really the first big power voltage regulator, and he had, you know, given a lecture in the morning. Floyd Kvamme had given a lecture and he was due to come back in the afternoon, Bob was, and we made the mistake of opening the bar at lunchtime, which was standard in France, you know. And, oh jeez, he started drinking his gin straight, big tumblers or glasses and I could envision this was going to be a disaster. So after lunch he brings a full glass of gin back to the table, you know, and he's sitting right next to Peter Sprague who is the chairman of the board, and Peter is a young man at those days. And the rest of them are lined up. And I was in the audience. I wasn't even up there. And I get a hold of Peter and I said, "Peter, get rid of that gin," you know, "before he gets, gets falling down drunk. So, poor Peter sacrificed himself. He drinks it. And Bob gets up to start his talk, you know, and he goes over to the microphone and he starts talking and he reaches for his glass, he turns around and reached for his glass, it's empty and he shouts, "I'm not going to say another word until you fill this glass up." Literally. We had no choice. We had to get his glass filled up. And then he went on with the lecture. And he, you know, he got plastered, but the interesting part of it is he was just so damn smart, you know. Even drunk he could just wow these people. And of course I think that most of these engineers were electronic engineers, they were young guys and the idea of this character whose obviously very smart and very successful is acting like a jerk up there seemed appealing to them. They would ask questions of him, and he'd shout, "I don't understand how you could be so blanking stupid to ask a question like that. It's obvious, the answer!" And they just loved it.
RW: But Silicon Valley has tolerated exceptional...
CS: They're much more tolerant.
RW: ...people if they're bringing something to the bottom line.
CS: I think you're right. I think, you know, Jean Hoerni was like that. He had tremendous talent. He was a very, very different kind of person. It's funny. You know, later that evening we got Bob back to the hotel which was, you know, for a while I thought he was going to fall under the Metro. God, he was standing at the edge of the Metro, you know, and he was waving back and forth and I'm standing in back of him ready to grab him, you know. Had he fallen in front of the Metro you could forget National. We were over. We get him back to the hotel and put him to bed, and I went downstairs to have a peaceful drink, right? And low and behold I look up and he's coming down the stairs and he goes out the door. I race out after him. He goes to one of these hostess bars, you know, on the Champs Elysee and I come in and he's there, he's surrounded with these girls, these hostesses and he's demonstrating and. First of all he's got a big roll of bills at the bar, and that's what drew all these women and he's demonstrating to them how he can drink straight booze out of a glass without hands, you know, he lifts it up and he's drinking it and the glass breaks, and blood starts coming out of his mouth, you know, and these women take him out off to the women's john, you know, and I'm by the bar and I'm trying to go what the hell am I going to do about this and get this idiot back in bed. Crazy.
RW: 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?
CS: Yeah. It was a bunch of things. I think, you know, a lot of it happened. It was tough for the group from Motorola to turn this thing around. I think, first of all, you know, the people at Fairchild saw themselves as being very successful, and they were. I mean they had the best R and D in the world. The costs were, mainly because of Southeast Asia, were tremendous in terms of product that was volume product, not very complex devices, and when we got these complex products the costs shifted back into the fab. But prior to that it was out in assembly. And when this whole new management gang came in it was, you know, difficult for the Fairchild people to swallow that. And it's human nature, you know, you're taking over a company, it's human nature for you to indicate whether you do it purposely or not, a preference for the way you did it, and we did it this way. That was a better way, blah, blah, blah. And then you had the combination at the same time with all these guys stealing all the people. And obviously we knew who the right people were, for any damn job we knew the right people because these people had worked for us. And they had more loyalty to us and to, you know, Intel and AMD and Signetics and the Howard Bozz organization. And then they did to these strangers who came in from, so they got, I mean they truly got raped. I know Wilf takes exception there but I don't think they had much of a chance no matter what. And they had a lot of, you know, these were good people that came out of here. I tried hiring Wilf, for example. I like to point out to him I got his first big raise at Motorola by giving him a job offer. But I don't know whether it would have been possible to turn it around. And then, of course, when Schlumberger, you know, bought and obviously, you know, Wilf Corrigan was the guy who was the authority on how that all happened. 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.
RW: Well, and also from Schlumberger. They dumped a ton of money...
CS: They sure did, that's right. They pumped a lot of money in.
RW: And so, why did you buy them at National then?
CS: 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 the linear automated designs operation called Classic I think it was. Is that right?
CS: I can't think of the name right now.
RW: I'm a digital guy.
CS: Okay. We wanted that and also we wanted their discreet business. Our discreet 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...
RW: The Clipper.
CS: The Clipper. We sold the rights to that to this outfit in Florida.
CS: Right. Yeah, so we got all 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.
RW: They went public and...
CS: They went public and very successfully. They got a nice, you know, business going.
RW: Well, it was in the '70s that we in the valley looked at the bargains of the computer manufacturers and of instrument makers and we said, "Look, we hold the keys to all of this. Let's go into the watch business, the calculator business," and you were one of the participants in that.
CS: Yeah. And that's not what I'm proud of. Actually, I see it a little bit differently. I mean there's a little bit of what you just said in terms of looking at the computer business and seeing that we're the reasons why it's successful. Why don't we, you know, run it? But you know, the semiconductor business, the semiconductor business has been very cyclical, and inevitably every time you go on a down cycle, especially in those days, you start looking around and saying, you know, God our growth rate's stopped, what can we do to reaccelerate? And when you look at this in the very early '70s we're in one of those cycles and we started looking at, you know, other possible means of exploiting our position, which really ended up being looking at integration further integration, forward integration. And the first thing that we did is made a calculator. And when we introduced it, it was the cheapest calculator and I emphasize the word cheap on the market. We introduced it for nineteen ninety-five. I can remember demonstrating it to some analysts at Ricky's here and I had in one hand I had a Fridon Mechanical, and the other one this nineteen ninety-five Polish notation, you know, calculator and I said, "Look, same capability. This one is twelve hundred dollars. This is nineteen ninety-five." And I said, "Also, this has got more reliability." And I tossed the Fridon calculator and it hit the floor and the keys and everything went all over the place, right? And I tossed the plastic, you know, calculator and it just bounced and, you know, nothing there to fall apart. The real problem with all that activity, I mean we were initially successful. We got in the watch business, too. We were initially successful, but it was a terrible mistake because it diluted our effort and focus in the semiconductor business. Why did we get into that? First of all, we had all together too high a view of ourselves and we thought we were unstoppable, unbeatable. You know, we make chips and Christ, nobody can be as smart as we are, and we looked at these people who were in the consumer business, we looked at them as being, you know, lightweights that we could obviously do better than they do in this business. Well, they handed us our heads, you know, the consumer business is an entirely different business. I mean it's one thing if you're going to sell to an engineer. An engineer looks at your product like an engineer. But you're going to sell a watch, I mean you're looking at your, I mean god, here's those bunch of engineers sitting around trying to decide what the case should be made and how do we, you know, get it designed so it's attractive and, yuck, awful, awful business worth. Another cycle went on around the mid '70s, got us into the computer, no, I'll take that back, got us into the checkout system business. We happened to be very successful in that. We captured around thirty-five percent of the market with Data Checker. Again though, you know, the reason we run into it is because we thought our chips were really a significant factor in the success of it. Once we got into it we found out it was marketing was far more important. Service was more important. I mean you name it. The chips were, forget it. But we were more fortunate there, although we finally sold out there. And then we followed Intel into the memory, IBM memory business. And God, we made a ton of money there, initially. And we sold through a marketing outfit. And they led us into the computer business. We started making, you know, 1-mip IBM compatible mainframes. And that was a hell of a nice business for a while and then suddenly IBM cut the price. They got sick and tired of these nobodies, you know, diddling with their business and they just murdered the price. And our sales went from here to here overnight. Zero. Stopped selling anything. But we had a contract with this outfit. They had to keep taking our output. We kept shipping to them because the contract said they had to accept through this particular year ex-number of devices and we were shipping and then they weren't selling, they were stacking them up. They went bankrupt, went under. And now we're caught in a real bind. What do we do? I mean we're stuck in the computer business. And by then I realized that I didn't want to be in this damn business. I wanted to be back in the semiconductor business but I was stuck. So we had to take them over. And we got it cheap, but that threw us in the heap. You know, this was all occurring at the same time the wars with Japan were going on, because the memory wars had started. And we were, I was especially very outspoken about the Japanese protectionism and what have you, and dumping in the United States. This was the time when we started the SIA, which was fundamentally started to protect us in some way against the Japanese. And it became obvious because IBM had slashed the prices. The profit margins were dramatically reduced. We could not continue the development effort in computers that was required to stay with IBM, so it threw us in the hands of Hitachi, and there we had to go hat in hand begging Hitachi to forget about all this stuff without telling you how bad you guys are. You got to start supplying these goods because we can't. And we sent Floyd Kvamme. I don't know whether you know who Floyd is.
RW: I know Floyd.
CS: Great, capable person, very successful venture capitalist now. But I had sent him on various, you know, seminars to bash the Japanese, specifically Hitachi. Because Hitachi and a few other companies had just been found guilty of something in the TV business, I can't remember what it was. Probably dumping but I'm not sure, you know. And one of the comments that Floyd made at one seminar is called Hitachi a criminal because they had been found guilty. Anyway, poor Floyd was in charge of the computer business so he has to go over there to make a deal with Hitachi and they wouldn't talk to him. He's sitting in a hotel, you know, for days trying to get an audience with them. Anyway, that was the last experiment, the last experiment I think any of the companies took in forward integrating, because we all had our nose bloodied in those businesses.
RW: Well, it worked out well for me. I bought one of your 1-mips. It was the actual machine...
CS: Is that right?
RW: at LSI Logic, and we got it for half the price of a VAX. It was a little more powerful and maybe that was the last machine you sold.
CS: It could be. You're right.
RW: ...Japanese and due to the threat of their takeover of the memory business the Semiconductor Industry Association was formed. Were you part of that?
CS: Yeah. I think the guy who should get the most credit for the formation of SIA, Wilf Corrigan. He was still at Fairchild at the time, and he talked to four of us. It was Bob Noyce, and I and Jerry Sanders about the whole issue of the industry organizations that we had participated in, EIA for example, was so broad, represented so many constituents that there was no focus on the semiconductor industry, and we really need focus on ourselves so we had a meeting and we agreed, we made two decisions; one we were going to approach John Welty at Motorola and make him chairman because that would bring Motorola in. We didn't go after TI because TI had become very anti-industry organizations because of some negative experience......Hi, Charlie...negative experience with another organization. So he joined and we hired an executive and we were off and running, and in a very short period of time we had taken everybody but IBM and TI in, and then IBM fell and we finally got TI and we had a very effective organization. Primarily because the IC's, I mean the CEO's ran it. The CEO's did the lobbying in Congress and that led us to recognize that we developed a real concern about the amount of graduate students that were going into microelectronics, so we created the SRC, Semiconductor Research Corporation, which funded graduate work at universities on microelectronics. And then we went on to recognize that we still had this growing problem with the Japanese, you know. Now we're well into the '80s and people had started dropping out of the memory business. There was, you know, really nasty dumping going on. And we had this meeting in Boston and I asked the question. I said, "You know, have we done everything possible to meet this challenge, or are we going to go under like the TV business and the radio business, etc., or is there something that we really additionally could do?" We had a conversation about that. We all decided that by God when it came to large-scale integration, the Japanese are more effective than we are in processing, in manufacturing. And we all agreed to that and I said, "Well, then what we really need to do is to come up with some way of establishing a manufacturing focus as a group." And I got the job to evaluate that. And I went around and found tremendous amount of support including IBM. IBM is not really a big joiner. But that led to the foundation of Semitech, which probably the biggest contribution Semitech made is to condition the companies to work together in areas where they don't compete. Companies don't compete in the manufacturing area anymore, in wafer fab, I mean in the semiconductor business. They compete in the design area and marketing. So it's possible for Intel and National to work together on vertical furnaces or something and not duplicate our efforts. Semitech did that. Very successful, the first as a matter of fact, the very first consortium in the United States amongst truly competitive, competing organizations. It turns out that probably we didn't need to do all these things because, you know, the Japanese ran into problems that were so severe economically that they probably would have run into this stonewall anyway.
RW: Did that require any special legislation, antitrust in these competing companies?
CS: No. We had the Justice Department look at it and they raised some questions and they ended up saying Okay. It was funded by the, you know, heavily by the Defense Department, fifty percent, they put a hundred million in, the companies put a hundred million in. Now its been so successful the companies funded a hundred percent, the government doesn't pay anything. But its been very effective in funding a number of development issues in the manufacturing area. That brings you back to Bob Noyce, you know, because we had a difficult time finding, I was a chairman of it at the beginning, and I was having really a devil of a time finding a CEO of Semitech, and I can remember coming back from Semitech with Bob Noyce on the airplane, we had had a board meeting down there, and I was telling him about my problems and he looked at me, we were having, I can remember sitting in the airplane having Beefeaters and he says, "You know, Charlie, I'm the right guy for that job." And this was about 1980, I don't know, about 1984 or something like that.
RW: He had retired.
CS: He hadn't, yes and no. I don't know exactly. I can't remember exact details but he wasn't really doing anything at Intel at the time. And I'm sure he was at odds as to what to do with himself. And he was the right guy. I mean he called it right. I mean he's the guy that everybody in the industry would respect and he did a hell of a job. Unfortunately, you know, a few years later he died.
RW: Yeah. Well, previous to that it was Bobby Inman, was it not?
CS: No, no. You're confusing it with an altogether different organization. There was an organization that set up down there in Austin, too, for a number of systems companies as well as some semiconductor companies. We joined it. I think AMD joined it, but that had nothing to do with Semitech at all.
RW: And it was a failure too, was it not?
CS: God, it lasted for a long time. I'm not even certain it doesn't still exist, but they never did much use for it.
RW: No, no. That was my impression.
CS: But he was a very, Inman was a very effective guy even though he got in to some weird business. Didn't they pick him to be a Secretary of Defense and then he turned it down and then he changed his mind or something strange going on or went on here, you know?
RW: I always thought he was flaky.
CS: It turned out he ended up being, yeah. Well, I didn't know him that well.
RW: Anyhow, so at some point you decided to leave National.
RW: What was...
CS: I retired to retire, decided to retire. I think Bob Noyce's death, that really shook me. We were really close to Bob and I remember I was out in the side lot here planting trees. These are all redwoods, by the way. I planted hundreds of redwoods here in this property and I was out here planting some trees on the side and my wife came out and she's crying and, you know, that Bob had just died and we went down to the memorial in Austin and started talking about it and said "You know, we're not going to live forever." And there were a lot of things that I'd like to do. Well, we have a very close connection to this little town Upstate New York, it's little you know, five thousand population kind of town and there's a lot of things we could do there with the money we've got, and I, you know, went looking for a replacement. Peter Sprague went looking and low and behold I made the terrible mistake of picking Gil Amelio. And then I, you know, retired in '91. And I've been busy as hell since, mostly in that little town doing a lot of useful things.
RW: Well, what sort of things?
CS: Well, first of all I built a building for this little college that's right outside of town. When I got out of the army in '46 I couldn't get into Cornell immediately so I went there for a term, so I developed a connection to this little college. And they have had a difficult time financially building themselves up so I became a trustee and I saw one of the things I could do for them is give them a new building for their admissions building and their recruiting of students and so on. So I built a building. And when I say I built it, I built it myself. I put the money up but I also built it. And I mean the whole schmeer because that's what I was doing as hobbies, building buildings. I did the power, the plumbing, the whole schmeer, which was very satisfying and they ended up with a million dollar building, and its made a tremendous difference because the other trustees like for example, Sandy Wiles' wife is a trustee. Sandy Wiles is an extremely wealthy guy and very capable guy, and his wife is a charmer, very capable. She's going to vest the building, a library there now and, you know, you get some momentum going. I like to feel that I was a participant in getting that going, and then the college doing great, you know, where the financial situation is in great shape now. Also, in the town I got involved in building a river walk. One of the things that impressed me in San Antonio, Texas is the river walk. So we have a river going through town, and it's always been ignored. You know, no one's paid much attention to it, so I participated in this group of building the river walk, and we got, you know, I mean I actually built it with, you know, other people because I supplied money, yes, but I do physical labor. And we're going to build bridges across it, you know, these covered bridges and its made a tremendous impact upon the town. I've gotten interested, we had a superintendent there of schools who was superintendent for thirty-five years. You know, if you look at most school districts, the turnover of superintendents is enormous. This is a man who started in 1913 as superintendent, and he retired in '54. A huge number of years he was there. Went in the First World War, he fought in the, you know, in the trenches over in France, came back and was superintendent again. And he just built this tremendous school system. A lot of people, I like to think like myself, got a great education there. We were at no disadvantage going to Cornell because the school system was solid. And we talk about education being important. And here is a guy who built a great system, did a hell of a job, and there is not any trace of his ever having existed. And I think that's the pits. So I started back this last summer trying to do something about that. First, I wanted to name the school district after him, make it the H. V. Latelle, you know, Saranac Lake School. Well, they shot me down on that. I went back there in January and there was a committee that I'd got that they had formed up to address this question I was raising and I invited all the committee members over to our camp there, and I wined and dined them. I figured I'd get them, sell them, but they sunk me. No, they're not going to do that. So I'm working on some other approach, maybe a foundation in his name that gives scholarships to kids and so on. I think one of the things that if you look at, we're getting far afield here, but one of the things that is a problem in this whole area saying that it's, you pick the student who has the best grades and give him the money, right. The problem with that is that frequently the kids with the best grades has parents that don't need it. They got the money to send the kid to school anyway. There's got to be some way to distinguish and pick out the deserving kids. I mean they're capable kids but they may not be the valedictorian, but their parents don't have the money to send them to school. And I think too much of the scholarships go to the people that get the best grades. Now, who can argue with, you know, obviously if you get the best grades you obviously ought to get I guess the bulk of the money but I would like to come up with some other, you know, solution.
RW: Well, you say it's a field, my engineering group at LSI Logic, which I thought was the best ASIC engineering group in the world...
CS: Why not?
RW: And I had over a hundred engineers, twenty were born in the United States. It, without...
CS: That's the wave here especially in Silicon Valley.
RW: ...without the immigrants Silicon Valley would be...
RW: ...would be growing apricots.
CS: Very much.
CS: Yeah. That's true.
RW: Well, you also wrote a book.
CS: Yeah, I've written a book. And it's about Silicon Valley, semiconductor industry in Silicon Valley, very restricted to that. Starting with the very beginning Schockley, Shockley, who's a very interesting guy, and ending with the death of Bob Noyce. And I spent a lot of time over the past couple of years interviewing people like you're doing and I have a whole pile of tapes, you know, from these people. And what's interesting is, well there's a whole bunch of interesting issues there. One is, I knew all these people and worked with them so that's easy to be in a relaxed environment talking about some of the old days and what have you. And you'd be surprised how interesting some of these guys, you know, were in a relaxed environment. Guys you wouldn't ever dream of being, you know, wild characters, how wild they could be. But anyway, there's that aspect. The other is, what's interesting is how everybody reconstructs the past, sees it, you know, to their benefit in many ways. And that's kind of, you know, interesting. The same thing happens to me. I mean I think back at what happened and obviously I like to draw the history a little bit in my favor. But it was a great deal of fun making all these tapes. And then the hard work started, you know, and I must admit I'm, it's one of the guys who used to work for me said, you know, Floyd Kvamme, he says "What, it's ridiculous. This guy never even wrote a memo." Because I never wrote memos, if I wanted to tell somebody something, I went there and told them. And I never kept any records, always, you know, threw that stuff out. But Floyd was saying, you know, "This guy's going to write a book. He's never even written them." And it was very hard. I actually got a guy to help me do the writing. But it's done. And I think it's going to be an interesting book. You know, my motivation is that we had a party up here with, I have a boy, my youngest son, Chris, he works at Xylinx and he has a, you know, obviously a large group of friends that are in the semiconductor business. And many of them were up here at this party we had, and I was talking to Chris and not so much Chris because obviously he knew Bob Noyce very well when he was a kid, but Chris's friends and in talking to them about, you know, the past and what have you, didn't even know who Bob Noyce was. I mean here is the guy who was the father of the semiconductor industry in Silicon Valley and they didn't know who he was. I would tell them stories about, you know, how they made mesa transistors and they'd look at me like who gives a blank about a transistor anyway. We got millions of them in each one of our chips now, right? So I decided well God damn it, I'm going to see if I can do something about that, which is where the motivation came from.
RW: Well, I hope it sells better than mine.
CS: I know it. But I'll tell you. I don't care if I have to peddle them door to door, I'll spread them around. But my primary interest is the target of semiconductor people, both the old and the new. Because they should have an interest in this. And I have had your book. I've read your book and, you know, Wilf gave it to me, and it was useful. Did you self publish that?
RW: No publisher would touch it. I thought they had bad judgment. I was wrong.
CS: Yeah, well...
RW: Well, finally, looking back on the continued success here in Silicon Valley to this very moment, what do you attribute this to, this unique phenomenon in the world?
CS: Oh God, so many people have answered that in so many ways, I don't think anybody really knows. I think it's just a unique combination of things, you know, money in the right place at the right times. Now, of course, it's awash in money. But even at the beginning, a lot of this is momentum issues and at the beginning there wasn't a hell of a lot of money. I mean if Fairchild gets started, they got started finding money in the East Coast, not here. And they had a devil of a time finding the money. But you know, it had to be Shockley. You know, Shockley had this unbelievable talent for drawing and picking good people and drawing them. Of course, you know, everybody who was a physicist knew who Shockley was. So that drew the Gordon Moores and the Bob Noyces and the Vic Griniches and the Jay Lasts, etc. Obviously, there's very effective universities in the area pumping out talent and inside the universities' talent, you know, professors and so on whether it's Stanford or Berkeley or San Jose, what have you. There was a lot of military here that was downgrading, going down in size and throwing off electronic technicians, which were super for us. California weather. I mean you can't knock it if you're from Upstate New York. I mean this goes on and on and on. And then once it got started, you know, once Fairchild started, you know, Shockley, it was good that Shockley was a lousy manager. He threw off the Big Eight, you know, and they started Fairchild. That happened because Shockley was a lousy manager. And Fairchild started and then the momentum started, and these guys were all young. Old men don't take chances. You know, I'm careful when I climb a tree today. When I was thirty years old, no problem, right? Well, that's the way it is when you spin off to start a company. You take a chance. You don't worry about. Thirty years old, so the company goes down in the tubes, so I go to work for more money somewhere else. And of course the more of that you got in one area, the more you get, and the trouble I think other areas have to get to do this is to get it started, get the momentum going. But who's to say. I mean you could come up with a hundred more reasons to...
RW: Well, Taiwan has done pretty well...
RW: . . . along those lines.
CS: Yeah, but what they haven't done is create this explosion in design capability, design talent. Japan hasn't done it. Europe hasn't done it. Taiwan hasn't done it. I mean the reason we're successful in the semiconductor business is because of design and the marketing that has to go with it. I mean it's easy for me, I'm here preaching the choir there, right? But, you know, it's not a manufacturing game anymore. And what we didn't recognize during the time we were fighting the Japanese is that fighting the memory business was a waste of time for us in the United States. That's a commodity. What we should have been doing is putting all our talent into design. And the Japanese forces do that. They drove us out of the business. If we're going to survive we had to throw our money into design and get moving. And it still exists today. You see all the semiconductor companies, they're all design outfits because who the hell can match us in design? At least right now. And I think that leads you to this offer kind of capabilities where all the new companies are starting now. I think, you know, the only problem with Silicon Valley is the house prices.
RW: Well, thank you Charlie. It's been very entertaining.