Inside Intel. Tim Jackson

He knew the industry inside out. He knew the products that Sanders was proposing to build. Reading between the lines of the limited biographical details that the plan included, he could even identify all the people involved. If anyone could see that the proposed company was stronger in marketing and sales than in the core discipline of inventing and building new products, it was Noyce.

      ‘You mean they’re actually going to make the stuff?’ he asked.

      The two men looked at each other and burst into laughter. Skornia knew that the ice was broken. There was no point trying to gloss over the shortcomings of the proposed business with Noyce. But equally, there was no need to explain Sanders’s qualities. Noyce had always recognized the steel inside his brash young marketing manager, and he was willing to back it. Yes, AMD could soon be in direct competition with his own company. Yes, its top management was drawn from people Noyce himself had turned down for Intel. But Bob Noyce would become one of AMD’s founding investors all the same. Why not? It was a gamble, but then Noyce loved taking risks.

      The decision of Intel’s founder to back Sanders was a strong psychological boost in the struggle to raise funding for AMD as Sanders, Turney and Skornia flew down to the Capital Group’s Los Angeles offices to tally the cheques and wire transfers that had come in from investors in the new company. It was 20 June 1969, and their plan was to confirm that AMD’s investors had contributed the minimum agreed sum of $1.55m, and then fly straight back to Silicon Valley to start work. But their timing was unlucky. The New York stock market had fallen sharply that morning and the institutions were playing it safe. Instead of celebrating the successful funding of the project, the founders were forced to hang around, imprisoned in the office by the sultry summer heat, waiting for more money to come in and canvassing every potential investor they could think of in an attempt to reach the threshold before the 5 p.m. deadline.

      By 4.30 p.m. the total stood at $1,480,000, and no number of recounts could make it any higher. For the next twenty minutes the three men and their two Capital Group advisers sat in sickened silence, staring at each other. At 4.55 p.m. a messenger arrived with an envelope. Inside was a cheque for $25,000 from a private investor in Bucks County, Pennsylvania. With five minutes and $5,000 to spare, AMD was in business.

6

       The Rebels

      WHILE INTEL WAS DEVELOPING its first memory chips, great things were happening in the world outside. The company’s founders relaxed an early rule forbidding radios in the lab so Intel engineers could listen while they worked to Neil Armstrong’s live broadcast from the surface of the moon in July 1969. But neither Noyce, Moore nor Grove had much time for the Beatles, hippies and marijuana, or any of the other enthusiasms that had gripped so many young Americans. For student activism or demonstrations against the war in Vietnam they had still less time. Interviewed by Fortune in 1973, Moore said: ‘We are really the revolutionaries in the world today – not the kids with the long hair and beards who were wrecking the schools a few years ago’.

      But political radicalism was not dead inside Intel. Its leading exponent was a gifted young circuit designer by the name of Joel Karp. With bell-bottoms and long hair, Karp was willing to risk the consternation of his employers by carrying anti-Vietnam petitions around Intel parties – and he was not even slightly put off when Grove and Les Vadasz, with the excess patriotism of the naturalized citizen, refused with stony faces to sign.

      Karp displayed a wonderful ability to wind up his more conventional colleagues. On one occasion a new sales executive hired by Bob Graham bumped into him as he was about to leave the office for a technical meeting with a client. The shocked sales chief took one look at Karp’s shoulder-length hair, and ordered him to get it cut before attending the meeting. The following day Karp reappeared in the office with his hair blow-dried and styled with great skill, but only one-eighth of an inch shorter than the day before. There was silence from his colleagues as Karp walked down the lab, informed the sales chief with a smile that he was going to claim the haircut as a business expense, and presented him with a receipt for the then astounding sum of $25.

      ‘What about taking a bath?’ the VP replied acidly. ‘Will you charge that to the company too?’

      Since he had been handing out leaflets arguing against the Vietnam war, Karp was the most natural suspect when a group of peace protesters assembled a picket in front of Intel’s offices to demonstrate against what they mistakenly believed to be a company that was engaged in military contracting. For once, even Bob Noyce displayed a flash of anger. ‘Get those fucking Berkeley friends of yours outta here,’ he told Karp through gritted teeth.

      But beneath his long hair Karp had a rare aptitude for circuit design. A graduate of MIT, he had taught the subject to scientists at NASA, and had spent some time designing Polaris nuclear missile systems. Intel found him at a competing electronics company, and brought him in to do crucial parts of the work on the design for Intel’s first MOS memory chip. He was also the principal designer of a new MOS chip commissioned by Honeywell to follow the bipolar 3101 project that H. T. Chua had worked on, and played a big part in bringing into the daylight a later product that would make Intel’s fortune.

      Another highly visible young member of the Intel crew was Bruce MacKay, who had the double distinction of being both the company’s youngest professional staffer and its only professional without a university degree. Born in Britain, he had learned the ropes of electronics at Texas Instruments’ local facility there, before moving to Bell Telephone in Canada.

      ‘It’s lucky that you’re over twenty-five,’ Andy Grove told MacKay one day, ‘because we don’t hire anyone under twenty-five.’ The young engineer, who was part of the team responsible for taking memory chips off the wafer lines and sending them through assembly and test, refrained tactfully from giving Grove his date of birth there and then.

      MacKay drew attention to himself by becoming the first engineer to try to resign from Intel. A call came from AMD, and MacKay was invited over to meet Jerry Sanders in Sunnyvale, where he was subjected to the full power of the Sanders sales pitch. He was told that he would be working with a group of real people instead of a bunch of weirdos; he would have the same responsibilities but more money; and he would be given an outright grant of company stock instead of options. Intel’s stock-option scheme was arranged so that only a quarter of the options that employees were granted could be exercised in the first year. To exercise the rest, you had to stay three further years – but by then, you would have been given three more sets of options, each on the same terms. This meant that every Intel employee wishing to leave had to walk away from a significant block of shares in the company.

      MacKay, whose badge showed that he was Intel employee number 50, liked what Sanders told him. Biting the bullet, he told his immediate boss that he was leaving. The next day Andy Grove appeared at his desk, insisted on taking him to a local bar in his rusty old Sunbeam Alpine, and sat him down at a table with a bottle of Scotch placed between them.

      ‘How can you do this?’ Grove demanded.

      MacKay had his response ready. ‘I want to work somewhere where manufacturing is taken seriously,’ he said. ‘You guys just don’t think it’s terribly important. Tell me, Andy: if you had the choice of two seminars, one on solid state physics and one on inventory management, which would you choose? I know the answer already.’

      But Grove was not to be put off. He kept MacKay talking and drinking until three in the morning – and when MacKay staggered up from the table, he had agreed to go back to AMD and tell Jerry Sanders that he was staying at Intel.

      From that day onwards MacKay’s job suddenly began to get more interesting. He was given responsibility for the chip assembly operation that was carried out for Intel under contract across the Mexican border in the town of Tijuana. Several times a week MacKay would drive down Highway 101 past San Diego, cross the border into Mexico, and check on progress.

      Strictly speaking, because he was a British citizen, MacKay did not have the privilege of free border crossing that an American