For All the Chips: Intel’s Rise to the Top

After signing a research contract with Sherman Fairchild’s Fairchild Camera and Instrument Corporation, the eight former employees of Shockley Semiconductor Laboratory launched Fairchild Semiconductor. Each of the eight had invested $500 in the startup, while Fairchild put up over $1.3million. “That may not sound like much now,” Moore says, “but it was a month’s salary in 1957.”

The new company began a search for a general manager. After all, none of the eight had any experience in setting up or managing a business. They may have been highly educated, but their PhDs had rarely taken them out of the lab. Ed Baldwin, an engineering manager for another one of the largest semiconductor companies in the world, was finally hired. Baldwin proceeded to teach the eight men about everything from corporate organization to marketing. However, it wasn’t long before Baldwin decided to branch out and create his own competing semiconductor company. “This was the first of the Silicon Valley spin-offs that we suffered,” recalls Moore. “After our initial feelings of shock and betrayal, we sat down and discussed what we should do.”

At 29-years-old and brimming with confidence, it was decided that Noyce would serve as the company’s new general manager, while Moore took on his old position of director of research and development. The eight set out on a mission to create the first silicon transistors. “We still weren’t really quite entrepreneurs, but we had learned something along the way,” says Moore. Under Noyce, Fairchild reinvented the integrated chip – a silicon chip with many transistors all etched into it at once – and filed for a patent. “We had no idea at all that we had turned the first stone on something that was going to be an $80 billion business,” says Moore.

By the end of the 1960s, Fairchild had become a $150 million business with over 30,000 employees. That, however, was when management problems began to plague the company. When two CEOs were fired within a six-month period, and three board members from the West Coast were trying to run this East Coast company, Noyce and Moore decided they had had enough. “I felt that new management would probably change the nature of the company significantly,” says Moore. “I decided I’d rather leave before any changes, than after. So, the two of us set off to do something else.”

In 1968, with a simple one-page business plan that Noyce had written on his home typewriter, Intel (Integrated Electronics Corporation) was founded. “We saw semiconductor memory as an opportunity to make something complex and sell it for all kinds of digital applications,” recalls Moore “So that was the first thing we went after. That was really the basis of our business plan.” From there, Intel began to focus on bipolar transistors and metal oxide semiconductors. “Fortunately, very much by luck, we had hit on a technology that had just the right degree of difficulty for a successful startup,” says Moore. “This was how Intel began.” It would be seven years before the other big companies began to copy Intel’s technology.

In founding Intel, Noyce and Moore always planned on becoming big. By hiring staff with a high long-term potential, minimizing bureaucracy, and raising capital before they needed it, the pair capitalized on its startup phase.

Today, the success of Intel is apparent even to industry outsiders. Buy a new PC and chances are it will have an Intel chip inside it. Noyce and Moore not only created new technologies, but also served as a successful and encouraging example of entrepreneurship, or what Moore calls “the if-that-jerk-can-do-it-so-can-I syndrome.”

Noyce died unexpectedly of a heart attack in July 1990 at the age of 62. Moore continues to serve as Intel’s Chairman Emeritus.



For All the Chips: Intel’s Rise to the Top

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