Santa Clara Valley Historical Association

The high point of Shockley Semiconductor's existence may well have been the champagne breakfast to which William Shockley treated his brainy young work force after learning he would share the 1956 Nobel Prize in Physics.

Shockley's prize was for his development of the junction transistor, an improvement over the point-contact transistor that won Nobel co-honors for two Bell Labs scientists whose research he had overseen, Walter Brattain and John Bardeen. Associates rated him outstanding at assessing scientific talent and defining a research aim. But he had never run a company and, as David Packard said, after being asked how to hire a secretary and where to buy pencils, "Shockley didn't know the first thing about it." Some of his team questioned his priorities. Worse, they resented his treating them like children, using a lie detector test to try to find an information leak, and keeping an engineer standing for quite a while after reporting a lab discovery — Robert Noyce in one case — while he phoned someone at New Jersey's Bell Labs to assess its value.

By September 1957, eight of the young stars found they could no longer stomach Shockley's heavy-handed management. The group had chosen Noyce, Shockley's favorite, as its leader. Other members included Jean Hoerni, a Cal Tech chemist with two doctorates; Victor Grinich, a former SRI researcher; Julius Blank; Eugene Kleiner, a General Electric manufacturing engineer (now a prominent venture capitalist); Gordon Moore, who had grown up in San Mateo County before working for the Applied Physics Laboratory at Johns Hopkins University; Jay Last, an expert in photo optics from Corning Glass Works; and metallurgist Sheldon Roberts. Noyce had previously been with Philco-Ford.

Resigning, they decided to stick together and seek backing as a group. They worked in their garages and living rooms until Arthur Rock, then with a Boston investment firm, found a Connecticut company, Fairchild Camera and Instrument, that was willing to bankroll them as a division. Fairchild Semiconductors eventually made Mountain View its base, but early employees were still in a nondescript tilt-up at 844 E. Charleston Road, Palo Alto, in 1959 when Robert Noyce led them in inventing the first commercially practicable integrated circuit. Earlier, Jean Hoerni had contributed the planar process for deposition on silicon chips.

The eight recruited Ed Baldwin from Hughes Semiconductor to "provide seasoned management." Fairchild was still a newborn when Baldwin and the team he brought suddenly departed and founded Rheem Semiconductor Inc. They were charged with kidnapping Fairchild's trade secrets, a point that became minor once the integrated circuit reached the market. Rheem was sold within two years. However, the pattern for defections, at times with key technology, had been extended.

Transistors produced with Fairchild's mesa silicon planar processes won big orders first from IBM and later from the Minuteman I missile program. Fairchild Camera and Instrument exercised its option to buy out the founding group for $3 million, paying the founders $250,000 each in stock. After that, the parent company guarded its stock tightly and Noyce, now running the profitable division, found himself short of incentives to use in persuading talented associates not to go seek their own fortunes elsewhere.

Of the eight founders, Hoerni, Kleiner, and Roberts left first, in 1961, to found Amelco, which was bought by Teledyne Semiconductor in 1972. Four other Fairchild men quit to start Signetics, now owned in part by the Dutch firm, Philips Electronics. Despite the departures, Fairchild was big and important enough to lure many of the men revered today as semiconductor industry icons: Charles Sporck, Don Valentine, Andrew Grove, Tom Bay, Mel Phelps, Jerry Sanders, Marshall Cox, Bernie Marren, Floyd Kvamme and Bob Widlar, a peerless designer of analog linear circuits whose antics and independence became legendary.

Michael S. Malone, writing about Fairchild in his book The Big Score,called it a "corporate vocational school" for the young geniuses in its ranks. "Here they could screw up without serious repercussions -- after all, nobody else knew how the job was done either -- and learn from their mistakes." ... At Fairchild Semiconductor, he said, "the freewheeling, throttle-to-the-firewall business style of Silicon Valley [was] forged, its best-known personalities formed."

In the middle '60s, with Noyce promoted to group vice president and Charlie Sporck the general manager, Fairchild ran into trouble delivering products on time. Widlar and his linear team departed. Then, early in 1967, Sporck jumped to National Semiconductor, taking four executives with him -- a blow from which the company never fully recovered. Rivals Motorola and Texas Instruments both passed Fairchild in sales and profits. Personnel left in droves. Finally, in June 1968, Bob Noyce and Gordon Moore announced that they were going. Andy Grove soon followed. Fairchild hired C. Lester Hogan from Motorola, and he brought a squad of suntanned Arizonans with him to boss the place. That and the firing of marketing ace Jerry Sanders destroyed what morale was left. Although Fairchild prospered into the '70s, it was a wounded giant. New companies formed by its former stars — Intel, National Semiconductor, and Sanders' Advanced Micro Devices — captured the cutting edge of semiconductor progress.

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