The Computer Chip is Sixty

How a signature Silicon Valley start-up’s success decimated the company but led to “the greatest legal accumulation of wealth in history”

The first Fairchild integrated circuit contained four transistors. Photo: Fairchild Semiconductor
“No bigger than “D’ on a dime” from LIFE magazine March 10, 1961

A “Tyranny of Numbers”

Following their introduction in 1948, computer designers quickly adopted transistors as replacements for bulky, power-hungry vacuum tubes. As systems grew in complexity, they faced a “tyranny of numbers” problem. Figuring how to connect hundreds of thousands of tiny transistor packages together in a computer became exponentially more difficult with each new generation of machines.

Planar technology paves the way

Founded in 1957, Fairchild Semiconductor of Mountain View, CA, enjoyed instant success with an improved silicon transistor. Orders from US government contractors racing to overtake Soviet superiority in space with smaller lighter rockets gave the start-up immediate revenue and credibility. Reliability problems with the chips threatened to derail the company. Founder Jean Hoerni developed a solution called the “planar” process that coated the silicon surface with a thin glass layer (silicon dioxide). Licensed by every major semiconductor manufacturer of the era, planar remains the fundamental approach to making computer chips today.

Making Micrologic

The author at center with Jay Last (left) and key members of his Micrologic team. — Isy Hass, Lionel Kattner, and Robert Norman. — at the Computer History Museum in 2007.
Fairchild Semiconductor 1961 Micrologic Family announcement brochure

The exodus accelerates

As venture capital funds entered the arena, other Fairchild employees saw the opportunity to create their own companies and share the profits from a rapidly growing market. According to Moore, “It seemed like every time we had a new product idea, we had several spin-offs.” This debilitating talent drain combined with lack of investment by parent Fairchild Camera & Instrument Corporation weakened the Semiconductor Division.

“The greatest legal accumulation of wealth in history”

In 2017, industry analyst Rett Morris of Endeavor Insight hailed Fairchild Semiconductor as “The First Trillion-Dollar Startup.” Through its technical, business, and cultural innovations, the company spawned hundreds of ventures (more than 126 semiconductor companies alone through 1986) that established Silicon Valley as a world center of entrepreneurial activity and technological leadership. Morris traced the lineage of Apple, Facebook, Google, and 89 other public Silicon Valley companies back to Fairchild. Although the firm’s market valuation never exceeded $2.5 billion, he estimated the surviving combined progeny’s worth at over $2 trillion.

I photograph and write about Gardens, Nature, Travel, and the history of Silicon Valley from my home on the Monterey Peninsula in California.

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