Inside Intel. Tim Jackson

to pass two tests to get a job at Intel. You had to be willing to come to work for Bob and Gordon for no more than your current salary with your existing employer – and sometimes, if they thought you were overpaid, for 10% less. In return, you’d be promised stock options, which you would have to trust the two founders would be adequate compensation for a pay rise forgone. Also, you had to be willing to take a demotion. If Intel was going to grow as fast as its founders hoped, its first round of hires would soon be responsible for running much larger teams of people. In the meantime, they would have to spend a few months doing work that was actually more junior than in the job they had come from. An engineer who was currently running an entire division with 5,000 staff to order about and sales of $25m a year would find himself moving to a new job at Intel in which he was once again managing a single fabrication plant, or ‘fab’, and where the big issue of his day might be a maladjustment of a single machine.

      The consolation was the strong sense that things would not stay this way for long. Ted Hoff, a brilliant postdoctoral researcher at Stanford who was recommended to Noyce by a professor in his department, reminded the Intel founder during his interview that there were more than half a dozen other new companies already in the market trying to develop semiconductor memory. Was there any need for another semiconductor company? What were the chances of success?

      Noyce’s reply exuded quiet confidence. ‘Even if we don’t succeed,’ he said, ‘the founders will probably end up OK.’

      Intel’s new hires found that this confidence was equally shared by people outside the company. Gene Flath, a product group general manager hired in from Fairchild to a senior job in the fledgling company’s manufacturing operation, decided to spend the week’s holiday he was owed by his former employer down in Los Angeles looking over new chip manufacturing equipment at a trade show on behalf of Intel. When a couple of pieces took his fancy, it seemed only natural to put in an order for the equipment then and there. And it seemed equally natural that the vendors, hearing that Flath had signed up with Noyce and Moore, were willing to give him immediate credit. Noyce and Moore? That’s OK. They’ll have the money.

      There was something infectious in the evident confidence of Noyce and Moore. As their first working space, they chose an old Union Carbide plant, 17,000 square feet on Middlefield Road in the town of Mountain View, an hour south of San Francisco. When the deal was signed, Union Carbide hadn’t quite moved out. Intel got the front office of the building immediately, with the right to hang a big sign outside bearing its logo – the company name, printed in blue all in lower-case Helvetica letters, with the ‘e’ dropped so that its crossbar was level with the line. The idea was that the lower-case letters showed that Intel was a modern, go-ahead company for the 1970s; the dropped ‘e’ was a reminder to its customers that its name was a contraction of ‘integrated electronics’. Some employees, but not all, took that ‘e’ to mean that the word Intel should be pronounced with the emphasis on the second syllable.

      Over the succeeding weeks Union Carbide cleared more equipment from the back of the building and Intel brought more people into the front, until one day late in the fall of 1968, Intel Corporation found itself at last the sole occupant of a large industrial shell, ready plumbed for the heavy-duty power, water and gases that were essential to the process of making silicon chips.

      Fabricating silicon chips was the modern world’s answer to medieval alchemy, the turning of base metals into gold. Except here, the raw material was sand, which was turned into crystalline silicon which arrived at the fab moulded into a long sausage, two inches in diameter. The silicon would then be sliced into thin ‘wafers’ a fraction of an inch thick. By a series of secret, almost magical processes, each wafer would be coated with scores of identical miniature circuits, neatly stepped in rows and columns. Then the wafers would be scored with a diamond-cutter, and the individual chips would be sawn away from their neighbours and wired individually into black ceramic packages, often with a line of metal pins down each side. It was impossible to convey to your children what an achievement those circuits represented; when one engineer showed the completed chips in their packaging to his kids, they referred to them as ‘Barbie combs’. But if you were in the industry, you knew that each one could sell for a dollar, or ten dollars, or even more, depending on what was inside.

      It was the guy given the job of laying out the floor design for manufacturing who was the first to realize the scale of the ambitions of Intel’s two founders. When he asked what capacity the fab should plan for, the figure he was given was 2,000 wafer starts a week. Two thousand clean silicon wafers, each one starting its way through the production process. Each one etched with 100 or more circuits on its surface. Two hundred thousand circuits a week; 10 million a year. Of course in those days you’d be lucky if 10% of them came out right. But for a startup, which had not yet developed either a circuit design or a process to build it with, such investment in capacity was unheard of. Even Fairchild, which had become the world’s leading semiconductor manufacturer, could handle only five times as much. Who did Noyce and Moore think they were?

3

       The Third and Fourth Men

      ONE OF THE FIRST DECISIONS that Noyce and Moore had to take was to choose a director of operations for their new company. ‘Director Ops’, as the title was commonly abbreviated, was the job that carried responsibility for getting products designed on time and built to cost. Only sales and marketing, and the big-picture strategy decisions, were beyond its remit. Picking the right Director Ops was one of the most important decisions that any new electronics company had to make – and the success of Charlie Sporck at National Semiconductor was proof of how successful a company could be if it got its manufacturing operations right.

      With their reputation in the industry, Noyce and Moore could have hired just about anyone they wanted within fifty miles. Yet the choice they made was so bizarre that it mystified most of the people who were watching their new business take shape. They offered the Director Ops job to a guy who had no manufacturing experience at all – who was more a physicist than an engineer, more a teacher than a business executive, more a foreigner than an American. They offered the job to Andy Grove.

      Grove was born in Hungary in 1936 with the name András Gróf. Being Jewish, he was forced to go into hiding when German tanks rolled into Hungary, and to stay hidden for the duration of the Second World War. The defeat of the Nazis brought only a slight improvement to the hardships suffered by the members of the Gróf family who survived the Holocaust – for Hungary became a satellite state of the USSR, ruled with bleak and totalitarian oppression. Like many other Hungarians, the young Gróf was forced to struggle simply to achieve the basics of getting enough food to eat and fuel to stay warm – and his teenage years in 1950s Budapest were bleak.

      By 1956, after Soviet tanks crushed a reforming Hungarian government and replaced it with a puppet regime willing to answer to Moscow, Gróf had become a politically conscious university student. It was clear that young people who had thrown Molotov cocktails at the tanks didn’t have much of a future in Budapest – and that his life might be no more at risk if he tried to escape to the West than if he stayed where he was. The Austrian border beckoned, a gateway to a better life in the capitalist world.

      Some weeks later Gróf arrived in America aboard a rusty old ship that had carried US troops during the war. The journey fell far short of the dream nurtured by so many aspiring immigrants to America. Instead of admiring the New York City skyline as the ship made its way into harbour, Grove did not get so much as a glimpse of the Statue of Liberty. Instead, he and his fellow passengers were transferred through the Holland Tunnel by bus to Camp Kilmer in New Jersey, a former prisoner-of-war camp. Gróf’s first impressions of the grim dormitories were not favourable – in fact, he wondered whether the claims made by the communist propaganda machine that conditions were no better in the West might actually be true.

      Soon, however, things began to look up. Andrew Grove, as the new immigrant now called himself, moved in with an uncle in the Bronx, and enrolled in a course in chemical engineering at the City College of New York. He began to make a life for himself, waiting tables at restaurants in