American Experience (1988–…): Season 25, Episode 6 - Silicon Valley - full transcript

MAN:
We had to leave.

We had really burned
our bridges.

MAN:
This was something that was going to change everything.

MAN:
The history of Silicon Valley is people going to startups,

taking this gigantic leap.

WOMAN:
This little thing that he had helped to invent

was going to change the world.

MAN:
Innovation is everything.

"Silicon Valley,"
on American Experience.

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Liftoff! The clockrunning.

PILOT:
They have mass casualties up here.



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NARRATOR:
In June 1957, at San Francisco's luxurious Clift Hotel,



eight of the country's most
talented young scientists

and engineers assembled
for a secret meeting.

For the previous 14 months,
they had been working together

at Shockley Semiconductor
Laboratory outside of Palo Alto,

developing a technology that
promised to be revolutionary.

But in recent months,
William Shockley,

the head of the company and the
mind behind that technology,

had become increasingly erratic.

Now, the eight were conspiring
to defect--

to quit Shockley and form
their own firm,

under the leadership
of one of their own,

29-year-old Robert Noyce,

a Midwesterner with
a brilliant scientific mind

and the genuine affability
of a born salesman.

It had taken some convincing
to get Noyce onboard.

LESLIE BERLIN:
Noyce had a young mily.

And to leave sort of
a known paycheck

for something that there
was no model for,

this notion of breaking away
and doing something different.

NARRATOR:
Soon it came time to seal the deal.

In the absence
of an official contract,

eight newly-minted dollar bills
were passed around the table

for signatures.

Noyce got out his pen.

MICHAEL MALONE:
I honestly think that Silicon Valley begins

on a very specific morning.

That morning is the morning
that the guys from Shockley

don't know if Noyce
is going to go.

And he gets in the car that
morning and goes with them.

BERLIN:
The dollar bills they signed

are Silicon Valley's
declaration of independence--

a statement that we are going
to go out and start a company

according to our own ideals
and our own beliefs,

and nothing is going to stop us.

NARRATOR:
On that morning in 1957,

none of the eight defector
likely had any idea

what would happen next.

The coining of the phrase
"Silicon Valley"

was more than ten years
in the future.

The unique business culture

with which the place would come
to be associated--

openness over hierarchy,
risk over stability,

innovation over the tried and
true-- had still to be tested.

And the integrated circuit
the revolutionary technology

that would usher in a new era
in human history--

had yet to be invented.

That morning,

the future Silicon Valley was
just a speck on the map

and a most unexpected place for
the Information Age to begin.

Had it not been
for William Shockley,

everything that was to come

might well have happened
somewhere else.

At the time that Shockley
planted his flag

in California's Santa Clara
Valley, south of San Francisco,

in 1956, the area was known
mainly for its orchards--

mile upon lush, green mile
of fruit trees,

heavy with apricots,
cherries, almonds.

Marketers had dubbed it "The
Valley of Heart's Delight."

JAY LAST:
When I was 16,

I was living in a steel mill
town in Pennsylvania

and had a free summer between
my junior and senior year

and decided to hitchhike
to California.

And I spent the summer picking
apricots in Santa Clara Valley.

It was just an unbelievably
beautiful area

with all these fruit trees.

NARRATOR:
Far from the nation's banking and manufacturing centers,

the Santa Clara Valley was not,
at first glance,

an obvious spot
for a technology company.

All of the leading
electronics firms--

Westinghouse, General Electric,
Raytheon, IBM--

then had their headquarters
on the East Coast.

BuShockley had personal ties
to the valley--

his mother had lived there
for years--

and the land was
blessedly cheap.

Hoping to entice aerospace
and electronics companies

to the region,

Stanford University was offering
long-term leases in Palo Alto

at bargain-basement prices.

KATHLEEN COHEN:
Setting aside land that could be leased to those companies

was, I think,
a very, very important thing.

And so we have the university
then connecting with industr

This just created a terrific
atmosphere for entrepreneurship.

NARRATOR:
By the time Shockley set up his laboratory,

a handful of other electronics
firms--

Hewlett-Packard, Varian,
Litton--

also operated in the valley,

as did theissile systems
division of Lockheed Aircraft.

Here and there,
the agricultural landscape

already was beginning
to give way

to suburban subdivisions and
large industrial structures.

And as they had more
than a century earlier

during the Gold Rush, Americans
were heading to California

in ever-increasing numbers--

some 3,000 a month
in the late 1950s--

in search of opportunity.

COHEN:
People came to California to get started again

in their lives
in new directions.

The idea of the new is a very
exciti thing for Californians.

You're not as limited
to what has gone before.

NARRATOR:
For Shockley and the other entrepreneurs in the valley,

there was the genuine feeling of
starting something from scratch.

REGIS McKENNA:
This was pretty much a technological wilderness

when they came here.

Like the early pioneers
that moved west,

they somehow struck out
without really knowing

what the outcomes
were going to be.

NARRATOR:
Like many of the new arrivals,

William Shockley had made
his name in the East.

One of the most legendary
applied physicists

in the history of science,

he had spent much of his career
at Bell Telephone Laboratories,

the renowned private research
and development firm

in New Jersey.

It was there, in 1947,
that he had become famous

as one of the inventors
of a tiny electronic device

known as a tnsistor.

It's a transistor, no bigger
than a kernel of corn.

MALONE:
The transistor is a turning int in technology history--

and actually human history--

because it's taking
an existing technology

and moving it into a whole
new dimension.

NARRATOR:
Since the 1930s, most electronics--

everything from television
sets to hearing aids--

had run on vacuum tubes.

They were behind
the transmission

of telephone signals,
radio and radar,

and also ran the world's first

electronic
general-purpose computer,

which was built by the U.S. Army
during World War II

and popularly known
as a "Giant Brain."

MALONE:
It was the fastest computation machine anyone had ever seen,

but it had one big problem:
it was the size of a warehouse.

And these tubes consumed
a lot of electricity,

and they used to joke that when
you turned it on,

it dimmed the lights of the city
around it.

And you had to have men run
around inside the computer

changing tubes because they
burned out pretty quickly.

NARRATOR:
Vacuum tubes, like light bulbs,

worked by heating up
a thin metal filament.

And, as with light bulbs,

the filament burned out
from time to time,

requiring the tube
to be replaced.

The transistor, by contrast,
was virtually indestructible.

TED HOFF:
The transistor represented

a major advance in being able
too electronic work

with far less power
and a far smaller device.

NEWSREEL ANNOUNCER:
What's inside the transistor?

Dr. Shockley shows us using
a huge scale model.

Inside are two pins...

NARRATOR:
The key to the transistor was a chemical element

known as a semiconductor.

In between materials
like metals,

which conduct electricity
easily,

and insulators such as
rubber and glass,

which block electricity, a
semiconductor could do both,

enabling it to act as
an electrical switch.

By exploiting the properties of
the semiconductor germanium,

Shockley and his colleagues
had invented a device

with the potential to completely
transform

the electronics industry.

One of the first hints of what
was possible came in 1954

with the transistoradio,

which was small enough
to fit in a pocket.

(surf rock music playing)

The transistor radio
quickly became

the most popular electronic
communication device

the world had ever seen.

(surf rock music ends)

By 1955, scientists and
electrical engineers

all over the country were racing
to develop new applications

for the transistor.

Shockley had more
ambious plans:

to exploit the commercial
potential of the transistor

and make it the cornerstone

of a large and potentially
lucrative new industry.

He decided to leave Bell Labs,

founded his own firm
in California,

and began raiding Ph.D. programs
and electronics companies

for gifted young recruits.

GORDON MOORE:
He knew chemists had been useful to him at Bell Laboratories,

so he thought he needed one
in is new operation,

and he got my name
and gave me a call.

Fortunately,
I recognized who it was.

I picked up the phone, he says,
"Hello, this is Shockley."

LAST:
He just showed up in my lab at MIT one day, and I thought,

"My God, I've never met anybody
this brilliant."

I changed my whole career plans
and said,

"I want to go to California
and work with this m

NARRATOR:
Robert Noyce, then a 28-year-old research manager at Philco,

the Philadelphia-based
electronics firm,

was equally impressed.

As he would later say
of his phone conversation

with Shockley,
"It was like talking to God."

Just over a month later, Noyce
was headed out to California,

an interview at Shockley
Laboratories scheduled

for the following morning.

MALONE:
It was a chance for him to be

among the best and the brightest
young scientists in America,

a chance to work with this
acknowledged genius.

And Shockley was making noises

about how he was going
to transform

the electronics industry,

you know, with brilliant
new inventions.

I mean how do you say no
to something like that

NARRATOR:
Shockley touted his new team

as the "most outstanding
in the semiconductor field"--

a dozen-and-a-half young
scientists of various stripes--

physicists, electrical
and mechanical engineers,

metallurgists, tool builders,

all of them rising stars
in the field,

all but a handful
under the age of 30.

LAST:
We were all about the same age,

and we had made scientific
accomplishments

on our own before that.

We were very, very compatible
with our scientific training

and with the way we looked
on the world.

NARRATOR:
There was Jay Last,

a Pennsylvania-born physicist
with a doctorate from MIT;

chemist Gordon Moore, who had
grown up in the farm country

north of the Santa Clara Valley
but had spent the last two years

at Johns Hopkins
Applied Physics Lab;

Jean Hoerni, a theoretical
physicist from Switzerland

with two doctoral degrees

and a glowing employment
recommendation from Cal Tech;

and Robert Noyce, a native
of Iowa with a Ph.D. from MIT

and the Shockley team's resident
expert on transistors.

VICTOR JONES:
There was no one there other than Bob Noyce

who was really well-grounded
in semiconductors.

Gordon Moore, Jay Last
and myself,

we used to get there at 6:00

and try to teach ourselves
semicotor physics

for the first hour
in the morning.

LAST:
I had never seen a transistor

until I went to work
for Shockley.

Bob knew and understood
transistors very well.

And talking to him was a way
of really learning

a lot of stuff very quickly.

NARRATOR:
By coincidence, Noyce had been introduced to the transistor

soon after its development
at Bell Labs.

He'd been an undergraduate at
Iowa's Grinnell College then,

studying under Grant Gale,
a physics professor

who just happened to have
gone to college

with one of the transistor's
inventors.

At Gale's request, Bell Labs
sent over the technical reports

on the new device.

Noyce devoured them.

With the transistor, Noyce knew
he was looking at the future.

"The concept hit me like the
atom bomb," he later recalled.

"It was one of those ideas that
jos you out of the rut,

gets you thinking
in a different way."

LAST:
The transistor was still a laboratory curiosity

at Bell Labs during that period.

MALONE:
It somehow manages to get to Iowa

to a little liberal arts college
in the middle of the country,

and sitting there in the class

is the man who's going
to make it all happen.

The odds are astronomical
of any of this occurring.

NARRATOR:
Noyce went on to study transistor-related technology

at MIT, then took the job
with Philco

in its newly formed
transistor division.

Bright and personable, he was
quickly promoted to manager,

and just as quickly came
to the conclusion

that the bureacy
of East Coast corporations

did not suit him.

McKENNA:
Places like Philco, and Bell Labs, and IBM--

they were very lar,
hierarchical kinds of companies

and businesses.

And it was very structured.

Philco was so structured that
your status and your furniture

was determined by a book
that actually had your title

and your position in the company

and what sort of furniture
you were allowed to have

in your office at that time.

And so everything was put in
a rulebook of some kind.

It was very stifling and
limiting in your own freedoms.

BERLIN:
Noyce wanted to be a scientist--

to be in a lab all day
every day.

He quickly discovered
that he hated management.

He had imagined himself
as an independent operator.

ROBERT NOYCE:
Philco was doing good work in transistors,

but Shockley was the top
of the field.

And I wanted to see if I could
compete with him, if you will.

I wanted to play
in the big leagues.

NARRATOR:
In California, Noyce would get his chance.

NARRATOR:
In 1956, Shockley Semiconductor had all the makings

of a success: solid financial
backing

from a Southern California
technology company,

Beckman Instruments,
and a straightforward mandate--

build a commercially viable
silicon transistor.

At that point, the standard
semiconductor used

in transistors was germanium.

But germanium functioned poorly
at high temperatures,

making it spectacularly
ill-suited to meet the demands

of the burgeoning defense
industry,

with its heat-producing missiles
and planes.

The solution was to create
a device built

from germanium's more stable,
more heat-resistant cousin,

silicon.

But silicon was difficult
to work with

and its conductivity
hard to manipulate.

Shockley wanted to try
a new method.

We were all going through
a learning experience

with silicon
and this new technology.

And we were making some progress

but there was still quite
a long ways to go.

NARRATOR:
Then, about six months into the project,

came news that Shockley had been
awarded the Nobel Prize

along with two of his colleagues
from Bell Labs

for inventing the transistor.

MOORE:
We adjourned to salute the honor

with champagne
starting at 9:00 in the morning

at a local restaurant.

NARRATOR:
All of them would later mark that celebration

as the beginning of the end.

LAST:
The whole atmosphere changed very quickly,

and... and it deteriorated
very rapidly.

NARRATOR:
Shockley's ego-- outsized to begin with--

now threatened to eclipse
his genius.

He became rigid, authoritarian,
impossible to please.

He began to show lots and lots
of anger towards people

who weren't doing things

according to what he wanted
to do.

NARRATOR:
Without warning or explanation,

Shockley demanded that much
of his team shift its focus

from the silicon transistor
to a complicated new device

called a four-layer diode.

MOORE:
Bob Noyce and I wrote a pretty strong memo to him

as to why the transistor
was where he ought

to continue to work,
but it didn't seem to have

any significant impact.

LAST:
This four-layer diode wasn't coming along very fast.

With the path we were on,

we were never going to have
a commercial device.

He couldn't face up to the fact
that he'd made a bad decision,

so he started blaming
everybody around him.

He was very abusive.

I went from being his
fair-haired boy to being

one of the causes
of all his problems.

It was very painful to me.

They knew how good they were,

and Shockley was treating them
as if they were children.

They would come in
with a great idea

and Shockley would get
on the phone and call

one of his old colleagues at,
you know, Bell Labs

and say, "What do you think?"

It must have been very, very
difficult to be told every day

that you can't be trusted
with your own ideas.

LAST:
We'd go away for the weekend

and bemoan the problems we were
getting into with Shockley,

and trying to understand why
things had all of a sudden

gotten so difficult
with the man.

NARRATOR:
Eventually, seven of the company's top scientists

and engineers--

Jean Hoerni, Julius Blank,
Victor Grinich, Eugene Kleiner,

Gordon Moore, C. Sheldon Roberts
and Jay Last--

decided to take matters
into their own hands.

They contacted Shockley's boss,
Arnold Beckman,

and requested that Shockley
be removed as manager.

MOORE:
Beckman essentially told us,

"Shockley's the boss, take it
or leave it."

We discovered a group of young
Ph.D.s couldn't push aside

a new Nobel Prize winner
very easily.

LAST:
So we were just completely sandbagged,

and we realized then
we had to leave.

We had really burned
our bridges.

McKENNA:
The business culture that existed in this country

was that you go to work
for a company

and you stay with that company

and you retire
with that company.

People did it at General Motors,

people did it at
Ford Motor Company,

people did it at Philco.

This was what traditional
East Coast--

and even Midwestern--
American values were.

MALONE:
These guys all joined on the belief

that they would stay there
forever.

And it really took the
incredibly bad management skills

of Bill Shockley to alienate
them so badly

that they would contemplate
just, you know,

stepping out the front door
into the abyss.

NARRATOR:
Shortly after the attempted coup at Shockley,

a letter landed on the desk
of Arthur Rock,

a financial analyst at the Wall
Street investment rm

of Hayden Stone.

ROCK:
The letter essentially said

that there were seven people
connected

with Shockley Laboratories

who were thinking of leaving

and did we know any company
that would like to hire them.

MOORE:
Arthur Rock came out to meet with us.

He told us,

"What you really want to do is
set up your own company,

and we will find you financing."

LAST:
None of us really knew many details

of what was involved in running
a company.

But it just looked like a very
exciting direction to go.

NARRATOR:
At that moment, Robert Noyce was not among the defectors.

But they all agreed
the new venture needed him.

MOORE:
Bob was the kind of person everybody liked

when they first met him.

He had that personality that
came across very smoothly.

And, as such, it opened doors.

And, of course, he was
brilliant, which helped.

NARRATOR:
Thanks to his knowledge of transistors,

Noyce had been given some real
authority in Shockley's lab,

and he was reluctant
to walk away at first.

NOYCE:
I felt that I had a commitment to Shockley,

and I wanted to do everything
I could

to make that organization work.

And so I felt that my
first obligation

was to try to talk those seven
folks into not leaving.

When I failed that,
I felt that I should join them.

NARRATOR:
Now they were eight.

LAST:
Our real aim was to keep working togeer.

We knew we could build
a transistor

that was going to be a very
successful, innovative product.

MALONE:
They've, in a sense, already rolled the dice in a big way

just being where they are.

You go to California,
you leave your life behind,

you strike out to try something
new and to start your life over.

And the job turns out to be
a nightmare.

Now you get to the moment
of decision--

are you going to roll the dice
one more time?

NARRATOR:
In New York, Arthur Rock was working the phones

in search of a backer.

ROCK:
We made up a list of 45 companies

that might be interested,

but none of them were willing
to take on

a separate company division.

They felt that their
own employees

would have problems with it,

that they would see it as a way
that someone else made

a lot of money at their expense.

They just couldn't get
it through their heads

that this was
a good opportunity.

We had a couple of months
of doing this

and were about to give up

when someone suggested that
I see Sherman Fairchild.

NARRATOR:
A prolific inventor and entrepreneur,

Sherman Fairchild was the owner

of Fairchild Camera
and Instrument,

a New York-based manufacturer
of aeronautic, electronic

and photographic products.

He was also the largest
single stockholder in IBM,

the computing giant his father
had co-founded.

ROCK:
Sherman Fairchild was well known

and well respected and used to
tinkering arnd with things.

And he immediately saw
the potential in this.

LAST:
Sherman Fairchild had the vision and the interest in us.

He was very rich, had a very
great imagination

and enthusiasm for things.

And if it hadn't been for him,

I don't know if
we would've found a sponsor.

NARRATOR:
Fairchild readily agreed to put up $1.3 million.

In exchange, he retained
an option to buy out

the new subsidiary.

If Fairchild Semiconductor
were successful,

the parent company was
positioned to reap the benefits.

Shockley Laboratory was about to
suffer an exodus of talent

from which it would
never recover.

MOORE:
Shockley was crushed.

He looked like a, a beaten puppy

as he walked out the door
that day.

NARRATOR:
With Shockley reeling,

Beckman issued a warning
to the eight defectors.

BERLIN:
They were told, "This is a shameful act.

"You need to consider
the consequences.

"You have essentially turned
traitor.

"You have broken what everyone
knows is the contract

"that you make when you start
working at a company,

"which is you're there forever.

"You've changed the rules
of the game

and you're never going
to live that down."

It looks easy nowadays
because we have a tradition,

largely set in motion
by those guys,

where it's accepted
in this town.

You're better off to go out and
start your own company and fail

than it is to stick
at one company for 30 years.

The real respect comes
from going out there

and being an entrepreneur.

But that wasn't true
in the 1950s.

The cost of failure now
is small.

The cost of failure back then
was enormous.

It must have been scary as hell.

NEWSREEL ANNOUNCER:
Today a new moon is in the sky,

a 23-inch metal sphere placed
in orbit by a Russian rocket.

NARRATOR:
The news stunned America.

On October 4, 1957,

the Soviet Union successfully
launched Sputnik,

the first space satellite,

dealing a powerful technological
blow to the United States

and intensifying the anxieties
of the Cold War.

McKENNA:
There was this underlying fear that existed

that we were imminently
going to be at war with Russia,

and that it was probably going
to be a nuclear war.

Once they were able
to demonstrate

that they could
put a payload into space,

that said th probably we were

much more vulnerable
as a country.

ROCK:
The Russians had just beaten us at our own game,

and I think everyone
in this country

was just befuddled by it.

How could this happen?

How could they beat us?

DOUGLAS EDWARDS:
The course of United States policies

in the competition with Russia
has been severely shaken.

This is Douglas Edwards.

Good evening.

JACK YELVERTON:
Sputnik caught the attention of everybody.

All of a sudden there was
a real recognition

that we needed to be a more
technically oriented society.

NARRATOR:
In the wake of the Sputnik launch,

President Eisenhower signed

the National Aeronautics and
Space Act, establishing NASA.

The agency began operations
in October 1958;

within two years, its budget
would top $400 million a year.

For recently incorporated
Fairchild Semiconductor,

the nation's new obsession
with technology

would prove the business
opportunity of a lifetime.

The space race is on

and the federal government
suddenly has an insatiable need

for precisely what these guys
are going to start building.

NARRATOR:
Fairchild Semiconductor--

soon-to-be manufacturer
of silicon transistors--

set up shop just down the road
from Shockley,

renting out a concrete slab
of a building

that amounted to little more
than walls and a roof.

MOORE:
At Fairchild, we had a clean slate.

We had an empty building
and we could do it

the way we now thought was
the right way to do it.

LAST:
The building had no electricity, phones, water.

We didn't have any toilets.

We had to go to the gas station
down the street.

A main topic of discussion
always was,

"How soon are we gonna get the
power and be able to start in?"

YELVERTON:
There were challenges and problems everywhere.

You had to build the equipment

that you needed to make
these transistors.

It was a whole brand-new world

that nobody had been there
before.

LAST:
We had the basic technology,

but all of the details
we had to do ourselves

and invent ourselves.

I remember the group of us

cleaned up the floor and said,

"All right,
now we're in business."

NARRATOR:
Fairchild Semiconductor had barely opened its doors

when the team got wind of a
potential sales opportunity.

The Air Force had hired IBM to
build a navigational computer

for the new supersonic
B-70 bomber.

What the military needed
was silicon transistors

that were not only capable of
withstanding high temperatures,

but also fast switching.

The most likely supplier

was the largest semiconductor
manufacturer in the country,

Texas Instruments-- or TI--

but the silicon devices
TI was making were too slow.

IBM invited the upstart
Fairchild

to bid on the contract.

A meeting was set up at IBM'sdn

in Owego, New York.

For the Fairchild founders,

there was no question that
Robert Noyce would be the one

to make their pitch.

YELVERTON:
Bob had the ability to charm anybody.

He had a great smile,
he had a quick wit.

when he walked into a room,

people would sit up
and pay attention.

BERLIN:
Fairchild at this point was three months old,

in talks with IBM, one of the
great companies in the country.

NARRATOR:
The device the military wanted

pushed the bounds
of existing technology.

To date, no electronics company
had built a single one.

IBM needed a sample batch
of a hundred.

IBM laid out the specification
they needed.

And they turned to Bob.

BERLIN:
One would expect that Noyce might be

a little bit quaking in his
boots when he hears,

"Well, the only way you can get
this contract

is if you can build a hundred
of these."

SPORCK:
Bob's thinking about it and he says,

"Yeah, we could do that."

Now, you understand,
they hadn't made...

they hadn't built
this transistor yet.

NARRATOR:
Noyce's confidence won Fairchild the contract--

and the fledgling company's
chemists and engineers

went to work.

They had already decided
to split into two R&D teams,

and now, under intense
deadline pressure,

they were racing
against one another

to develop a transistor
that met IBM's specs.

It took five months,
but in Jul1958,

Fairchild fulfilled
its first order:

100 silicon transistors
at $150 each--

30 times the going rate for the
less-sturdy germanium standard.

LAST:
We hadn't thought about how you shipped the device.

So I went down
to the supermarket

and got a Brillo box.

And the first product went
to IBM in a Brillo box.

When IBM starts buying your
transiin their equipment,

that tells the rest of the world
that you've got something.

LAST:
When I look back on it now, I'm just flabbergasted

that we did what we did.

We took the basic Bell Labs
technology

and turned it into a product
that nobody in the world

had ever made before.

We went to our first trade show,

and we got an enormous
reception.

NARRATOR:
As a triumphant Noyce put it to the Fairchild staff,

"We scooped the industry."

NOYCE:
I grew up in small-town America, which had to be self-sufficient.

If something was broke,
you fix it yourself.

We didn't have
the expertise around,

so we all had to be experts.

MANE:
Noyce comes from a generation

that we won't see again
in the electronics industry.

These are people that grew up
in a world without electronics.

Where they got their technical
chops, it's almost magical.

Dad may have bought a ham radio,

they may have had ffinity

to working on equipment
on a farm.

But what's interesting
about them is they all share

those sort
of middle-American values.

They were basically honest, they
were as good as a handshake.

There was a constant tension

between being masters
of the universe

and living in small-town life.

That tension drove
these guys on.

NARRATOR:
Right out of the gate,

Fairchild Semiconductor
had managed to capture

the industry's attention.

But building a cutting-edge
transistor

was only half the battle.

The key to success was being
able tmass-produce it.

LAST:
Our main goal was just figuring how to make

a lot of these things--
reliably and in short order.

SPORCK:
When you're building an automobile,

100% of the time
the car comes out.

When you're building
semiconductors,

sometimes a chip comes out
that works.

Frequently, nothing comes out.

MALONE:
Chip yields--

the amount of chips
that actually worked

when they came off the line--

were going up and down
unpredictably.

There are stories where they
discovered it was because

there were farm fields outside,

and whenever they put down
pesticide,

it would affect
the yields on chips.

The yield would change with
the water level in the ground.

If men didn't wash their hands
after going to the bathroom,

the uric acid crystals would
wipe out hundreds of chips.

It was an incredibly
crude process.

NARRATOR:
The select few working transistors d to be mounted,

connected to lead wires,
and put in casings--

a delicate, labor-intensive task

performed almost exclusively
by women.

YELVERTON:
It was just a given in the industry at that time.

The belief was that women were
used to doing needlework

and working closely
with their hands,

and they had better hand-eye
coordination.

GINGER JENKINS:
It was all manual dexterity.

My starting job at Fairchild
was called a die-attacher.

A die is a tiny little
silicon chip.

I attached them to the package,

with the gold layer
under the silicon piece.

And then after I was done
it would go to the bonder,

who would attach
little wires to it.

LAST:
When our devices came along,

there was an instant
acceptance of them.

It was the ideal component--

the small size and weight,
the high performance,

the ability to perform

under very high temperature
requirements.

The only thing we had
to figure out to do,

we knew they had to be reliable.

NARRATOR:
The reliability of Faihild's product was put to the test

in 1958, when the upstart
company beat out

its more established rival,
Texas Instruments,

to supply transistors
for the guidance system

on the Minuteman nuclear
ballistic missile.

SPORCK:
The Minuteman program was a godsend for us.

The military was willing to pay
high prices for performance.

How does the small company

compete against the giant TI
or Motorola?

It has to have something unique.

And then it has to have
an outlet.

Certainly the military market
was very important for us.

NARRATOR:
For the military, reliability was essential,

and the first Fairchild
transistors did not measure up.

An alarming number of devices

had to be returned
to the company

for so-called "random
catastrophic failure."

Lab tests revealed that
it took nothing more

than a sharp tap with a pencil

to make the transistor stop
working altogether.

LAST:
Here we had the product that scooped the industry,

anl of a sudden we didn't
have a reliable product.

We realized that when we were
sealing these up,

little specks of metal would be
loose inside the can

and short out the device
sometimes.

We were really running scared.

It would have been the end
of the company.

We needed to solve the problem.

NARRATOR:
For morehan a year, physicist Jean Hoerni

had been working on a radically
new transistor design:

a thin, protective layer
of silicon oxide

mounted on top
of the transistor.

Now, he and Noyce believed
its time had come.

The concept moved quickly
from sketch to basic component,

and then was rigorously tested
and refined.

In a nod to its flat top,

Fairchild dubbed Hoerni's
innovation the "planar process."

The method not only solved
the reliability problem,

it actually improved

the transistor's
overall performance.

YELVERTON:
The planar process was a major step forward

in the ability to make
silicon transistors.

Using the planar process,

you had a very clean and more
highly reliable transistor.

You could increase your yields,
you could reduce your costs

and make a much better product.

NARRATOR:
Fairchild immediately took out a patent.

SPORCK:
With the planar process, all hell broke loose.

Everybody else had to come
to our door

and plead with us
to get a license.

NARRATOR:
As orders began pouring in, Fairchild Camera and Instrument

decided to exercise its option
to buy its upstart subsidiary.

Each of the eight co-founders
of Fairchild Semiconductor

received stock options
worth almost $300,000--

roughly $2 million today.

"The money doesn't seem real,"
Noyce told his father.

"It's just a way
of keeping score."

MALONE:
If you look close enough at history,

most inventions are not
out of the blue.

They tend to arise
out of a milieu

where the time
for that invention has come.

In the late 1950s,
we had the transistor.

It's now being sold
in the millions.

It's got one problem:
it's a discrete device.

It does one thing,

and if you want to do
two things,

you have to have two of them.

And if you want to build
a big computer

that does 10,000 things,

you've got to have
10,000 transistors.

BERLIN:
The more of these discreomponents,

the number of connections
between them

grows exponentially.

So you could end up
in a situation

where you could have all
of the independent components

testing out as working,

and you could have
the circuifail

because the connections between
the components were failing.

So there were efforts
all over the country,

people trying to figure out,
"How can we somehow,

"at the same time that
we build these components,

how can we also connect them to
each other in a single device?"

Military might depended
on being able to build

these rockets anmissiles,

and so the Department
of Defense

was willing to pay
almost anything

for a lightweight,
reliable circuit.

NARRATOR:
The answer, when it came, caught Fairchild off-guard.

In March 1959, at an industry
trade show in New York,

Texas Instruments announced
that it had patented

an entire circuit on a single
semiconductor chip,

effectively trouncing
the competition.

Designed the previous fall
by an engineer named Jack Kilby,

TI's so-called "solid circuit"
spurred Fairchild to action.

"We were working day to day,"
Noyce recalled,

"to try and get
a competitive edge."

JERRY SANDERS:
At the time,

TI was the biggest company
in the world in semiconductors.

Fairchild was just
a, you know, peanut,

and wanted to beat TI.

I was at an industry show,

and I ran into a manager
from Texas Instruments.

I walked up to him
and shook his hand,

or tried to shake his hand.

He looked at me like,
you know, I was garbage,

and said, I' never forget it,

"Fairchild, we're gonna
crush you guys."

And I thought, "Wow!

That is really weird!"

So there was just
a lot of hysteria

against, you know, Fairchild
as it was making its way.

NARRATOR:
As head of R&D, Robert Noyce had been thinking

about ways to connect components
for some time.

In fact, two months
before TI's announcement,

he'd sketched some ideas
in his lab notebook

for a device that would come
to be called

"the integrated circuit."

LES VADASZ:
The integrated circuit idea is that,

hey, you don't have to have
individual devices.

You can have all these devices
in one piece of silicon

and interconnect them
right on that silicon chip.

NARRATOR:
Building on Fairchild's planar process,

Noyce's design linked individual
components together

with tiny metal lines

printed right on the protective
oxide layer.

Kilby's design, by contrast,
relied on thin gold wire

painstakingly threaded
between the components by hand.

SANDERS:
Jack Kilby just wired them together.

Bob Noyce said, "No wires."

In no way do I want to demean
Jack Kilby's work.

I mean, you know,
it was fantastic.

But it wouldn't have been
practical for mass production.

ROGER BOROVOY: I've wot
of brilliant people in my career

and, uh, he is at the top.

He had a way
of integrating facts

and coming up with something
you'd never expect.

NARRATOR:
Now, jolted by TI's news,

Noyce hurriedly resurrected
his notebook sketches.

LAST:
Bob and I got together and said,

"We have to show
the flag somehow."

So I made some crude devices

that we had
at one of the trade shows.

NARRATOR:
Noyce filed a patent for his integrated circuit in July 1959.

By then, he'd been promoted
to general manager

of Fairchild Semiconductor,

and with his new authority,

he put physicist Jay Last
to the task of figuring out

how to build
a commercial device.

VADASZ:
The devil is in the detail.

The concept is one thing;

the other thing is
to make it work

in a manufacturing environment

where you can just turn out
millions and millions of them.

NARRATOR:
It took two years, but in March 1961,

Fairchild introduced its first
commercial iegrated circuit,

called Micrologic.

At $120, Micrologic
was far out of reach

for the average private company.

But when President
John F. Kennedy

announced an ambitious
new space program in May,

it was clear that
the federal government

would be willing to pay for it.

KENNEDY:
These are extraordinary times,

and we face an extraordinary
challenge.

I believe that this nation
should commit itself

to achieving the goal,
before this decade is out,

of landing a man on the moon

and returning him safely
to the earth.

NARRATOR:
At a time when the average computer

was a room-sized machine

containing mile upon
tangled mile of wires,

Fairchild's integrated circuit,
or microchip,

made it possible
to put computer

right on board a spacecraft

and send it all the way
to the moon.

YELVERTON:
This was one of those

really important
disruptive technologies,

that this was something that was
going to change everything

in electronics.

(explosion)

BERLIN:
Brilliant people with brilliant ideas exist all the time;

it's just a question
of being a brilliant person

with a brilliant idea

in the right place
at the right time,

where people want
what you've come up with.

NARRATOR:
Fairchild landed the contract

to supply chips for NASA's
Apollo Guidance Computer.

Meanwhile, other semiconductor
manufacturers

began to license
Fairchild's technology

and build integrated circuits
based on the planar process.

By 1962, Fairchild Camera
and Instrument

was reporting the highest sales
and earnings in its history,

and rival Texas Instruments
was crying foul.

TI filed suit against Faird
for patent interference,

claiming ownership of the
integrated circuit concept.

BOROVOY:
Texas Instruments said, "We think we invented that."

Kilby certainly was first,

but Kilby's circuit
was not a practical one.

MALONE:
This is one ofhose cases of simultaneous invention.

Kilby has time precedence,

but Noyce's design
is the one that worked.

NARRATOR:
The suit would drag on for years.

In the end,
Fairchild and Texas Instruments

would agree to share licensing
of the integrated circuit.

By that time, TI itself
was building microchips

based on Fairchild's
planar process technology.

HADLEY:
I was driving down 101,

and at the side of the road

there was a large billboard
with a sun rising,

and it said something
to the effect that

Santa Clara County has more
Ph.D.s in high technology

than any place in the world.

And a light went off,
it was an epiphany,

and I said, "That's it,
I'm going to go into high tech."

NARRATOR:
Throughout the early 1960s, thousands of young men and women

poured into the Santa Clara
Valley every month,

lured by the booming electronics
and defense industries.

And though each passing year

brought new companies
into being--

and with them, new jobs--

Fairchild Semiconductor was one
of the valley's biggest draws.

VADASZ:
I was working at Transitron,

and I really wanted to come
to Fairchild

because at that time, that's
where things were happening.

SANDERS:
The technology at Fairchild blew me away.

To see what they were doing
at Fairchild when I went there,

I was in awe.

These were the smartest people
I'd ever met.

NARRATOR:
Crital to Fairchild's appeal

was the unique corporate culture
that Robert Noyce encouraged.

YELVERTON:
Bob had a very good idea

of how the company should behave
as a company.

He had some pretty
egalitarian ideas;

he wanted to break down
the distinctions

between management
and workforce.

McKENNA:
Bob managed by camaraderie.

He believed in teamwork,

and to him everybody at
Fairchild was part of the team.

HADLEY:
It's what you could contribute that really counted the most.

Everybody was highly competitive
to do the best in their job,

to make theicompany the best.

Why would we work
ten-, 12-hour days?

It wasn't because somebody
told us we had to.

We wanted to.

SPORCK:
We were bullish about where the electronics were going to go.

We did not have any hesitation
about unlimited growth forever.

MALONE:
The atmosphere of the early Fairchild

was a combination of c alege
dormitory or frat house

with sort of like a country club
locker room.

It was basically a bunch of men
in their 20s

starting to make real money

competing with each other
on who had the bigger swagger.

It either had to settle down
and just become another company,

or it had to blow up.

It was just too volatile.

It was just too much talent
stuffed into one place.

NARRATOR:
Even as it enjoyed its meteoric rise,

Fairchild Semiconductor

was beginning to unravel
at its core.

By 1962, fully half
of the founding team--

including Jay Last
and Jean Hoerni,

as well as numerous researchers
and engineers--

had left the company
to start new ventures,

most of them positioning
themselves as direct competitors

for the integrated
circuit market.

GEORGE MOORE:
It just exploded.

Every time we came up
with a new idea,

we spawned two or three
companies to try to exploit it.

NARRATOR:
Over the next two decades,

Fairchild would spin off
more than 100 new firms,

including Rheem, Signetics,
Molectro, Amelco,

General Microelectronics,
Advanced Micro Devices.

In the Santa Clara Valley, they
were known as "Fairchildren."

McKENNA:
There was constant startups.

Almost every company
had employees

coming out of Fairchild.

They were educating people
in this new era of silicon.

As people began to develop
their skills and knowledge,

the whole idea
of venture capital

also was starting
to grow and prosper.

You knew how to build a product,
because you were doing it.

It was strictly a matter
of finding the money

and taking the risk.

MALONE:
In the '60s at Fairchild,

everybody looks out there
and says,

"Why are we sitting
in the big city?

"We should be out there
panning for gold.

Let's go start
our own chip company."

Fairchild was like a seedpod,

and it just scattered new
companies all over this valley.

And that's what really began

what we think of as
the modern Silicon Valley.

NARRATOR:
By the mid-'60s,

Fairchild Semiconductor
was raking in massive profits

for parent Fairchild Camera
and Instrument.

In its first seven years,
the semiconductor division

had opened nine new
manufacturing plants,

including one in Hong Kong.

And at a time when NASA
was buying

60% of the integrated circuits
produced in the United States,

Fairchild was a major supplier,
shipping some 100,000 devices

for the Apollo space program
in 1964 alone.

Robert Noyce wasn't satisfied.

It was all well and good
to put Fairchild's microchips

at the disposal
of American astronauts,

but Noyce's real target
was the American consumer.

BERLIN:
Noyce and his colleagues

saw an expanse open
in front of them,

a world where electronics

were getting faster
and smaller and cheaper,

and this could mean anything.

Noyce just had this notion

that this little thing
that he had helped to invent

was going to change the world.

NARRATOR:
In the spring of 1965,

Noyce made an announcement
at an industry convention

that stunned even his staff:

Fairchild was slashing
the price

of its most popular
integrated circuit.

The microchips would sell
for just a dollar apiece,

less than what it cost
a manufacturer

to buy the components
and assemble them.

What alarmed Noyce's team
was that the price

was also less than it cost
Fairchild to make them.

YELVERTON:
There's a principle

that is pretty consistent
in the electronics business

that the first product
that you mak

is very, very expensive,
that is pretty consistent in the electronics business

and each additional unit
that you make

brings the cost down
just a little bit.

MOORE:
Bob was taking a risk that made us all gulp at the time,

but it turned out to be
the proper solution.

NARRATOR:
As Noyce expected, demand soared,

production costs plummeted,
and before long,

Fairchild was turning a healthy
profit on commercial sales.

VADASZ
Bob Noyce always looked forward.

I think he was confident
with risk.

McKENNA:
Leaders break the rules.

That's what they do.

And I think he understood
that principle,

that whole cultural attitude
of pushing the edges,

of pushing the technology
to where it's innovative

and thinking about things that
people hadn't thought before.

HADLEY:
It was exciting.

You know, our hearts and
passions were really in our job.

And we knew that
this was a force

that was just changing
everything.

NARRATOR:
Maybe it was the thrill

that came from always hovering
on the edge of discovery.

Maybe it had to do with being on
the literal edge of the country

and a continent away
from the old rules.

But by the mid-1960s,
the Santa Clara Valley

was about as charged a place

as any physicist or engineer
could ever hope to find.

MALONE:
We talk about the early era

of Silicon Valley

as being cowboys and Indians
and the Wild West show,

and it really was.

SANDERS:
It was a wild time.

People just drank too much.

I just remember that
three gin and tonics

should have been my limit.

And the bar of choice
was the Wagon Wheel.

SPORCK:
We just got in the habit of going over there

for a beer on the way home.

Sometimes it was more than one.

HADLEY:
It was very, very crowded.

Everybody from presidents
and CEOs down to line workers,

and everything in between.

SPORCK:
It got to be a hangout not just for Fairchild people,

but the spinoffs from Fairchild.

I mean, we all worked together,
even though we were competitors.

We'd go in there and everybody
was bragging about,

"I took that job away from you
down there at Hughes," you know.

"You guys had it
and I took it away."

I mean, it was just a marvelous
environment of young guys

having a good time
competing with each other.

SANDERS:
Conversations were just rampant

about the latest
sputtering device

or the latest piece
of epitaxial equipment.

It was almost like a salon,

you know, everybody talking
about what was going on,

who was working where,
who was doing what.

JENKINS:
You could make friends or lose friends at the Wagon Wheel.

I mean,
it was a hub of networking.

SPORCK:
There were always

a lot of girls
from the factory there too,

which is not all good.

HADLEY:
There was a lot of hanky-panky going on.

I remember thinking
that the divorce rate

was probably 1%,
not just 100%,

because a lot of the second
marriages didn't make it either.

SANDERS:
We just all were very excited about building our business,

building an industry.

So there was a sense that
we're all in it together.

What was good for one
was good for all.

MALONE:
Fairchild was one of a kind.

They were hugely talented,
they were first in,

and they moved really,
really fast.

Motorola was chasi them,

Texas Instruments
was chasing them,

the big companies like IBM with
their microelectronics units

were chasing them,
and nobody could catch Fairchild

because they were just
so creative and so brilliant.

But they were destined
at some point to stumble,

and the moment they stumbled,

everybody ran right over
the top of them.

(bells ringing)

NARRATOR:
In 1965, Fairchild Camera's stock

rose faster than any other
on the New York Stock Exchange.

"All the excitement,"
Time magazine reported,

"is over one division,
the Semiconductor branch."

YELVERTON:
Fairchild Semiconductor

really became the tail
that wagged the dog.

It produced most of the profits

and all of the growth
for Fairchild Camera.

NARRATOR:
Increasingly, success bred discontent

and a simmering resentment

toward Fairchild's
parent company.

At the top of the list
of complaints

was the fact that
semiconductor profits

did not get reinvested
in the division's growth.

SANDERS:
As a result, companies like Texas Instruments particularly

were catching up
with Fairchild technology.

As was Motorola,
they were catching up.

And so, with less funding
for R&D

and less funding
for new plants and equipment,

it was frustrating.

MALONE:
These guys on the West Coast,

they're looking at millions and
millions of dollars being made,

metaphorically being put into
a Brinks truck and driven east,

and they're not getting
a piece of their success.

NARRATOR:
For Noyce, it was a source of deep frustration.

He had the power to direct
the semiconductor division

and the responsibility
for its performance,

but no ability
to reward his staff.

YELVERTON:
We tried very hard to get Fairchild

to think in terms of using
more creative compensation,

including the idea
of a stock option program.

They tught we were a bunch
of dreamy-eyed socialists.

NARRATOR:
Worst of all, in-fighting and a lack of communication

between the R&D
and manufacturing departments

left the company scrambling
to fulfill its orders.

ANDY GROVE:
The research lab and the manufacturing location

were seven miles apart.

Those seven miles, from the
standpoint of collaboration,

could have been 7,000 miles.

BOROVOY:
Things were not good.

The company was floundering;
products were very, very late.

Bob was not a day-to-day manager

by any stretch
of the imagination.

He knew that was not
what he did well.

GROVE:
I had nothing but unpleasant, discouraging dealings with him

as I watched Bob manage
a troubled company.

MALONE:
I think one of the problems Fairchild got into

was Noyce trusted people
maybe too much,

so that the company oftentimes
became unharmonious.

GROVE:
If two people argued and we all looked to him for a decision,

he would put a pained look
on his face

and maybe said something like,

"Maybe you should
work that out."

re often he didn't say that,
he just changed the subject.

SPORCK:
Bob's biggest problem is he had great difficulty saying "no."

If two department heads
had different opinions

as to what they wanted to do,

it was whoever was there last
got the right decision,

because he always gave you
a "yes."

NARRATOR:
As the internal strife mounted and earnings plunged,

Fairchild began to splinter.

In March 1967, Noyce's
right-hand man, Charlie Sporck,

announced that he was leaving
to head up a competitor:

National Semiconductor.

MALONE:
That stunned Fairchild.

And when Sporck left
and went to National,

he began to raid Fairchild
for talent,

and these guys
all started going to National

and they were all getting
stock options.

And they were succeeding.

That was the real eye-opener.

SPORCK:
You're not completely pleased with the corporate office,

and you got these guys leaving
and starting companies,

and the companies
are running, working.

You get a look around
and in the mirror and say,

"Well, you know, how about you?

What are you gonna do?"

I know now that Bob was thinking
the same thing.

NARRATOR:
Gordon Moore, chemist and director of the R&D department,

was the first to hear
of Noyce's plans.

MOORE:
Bob came to me and said, "How about starting a new company?"

Well, my first reaction was,
"Nah, I like it here."

And then a couple of months
later he came back and said,

"I'm leaving.

How would you like to start
a new company?"

Which put a whole different
light on the thing.

NARRATOR:
Noyce and Moore resigned from Fairchild in the summer of 1968.

Noyce was 40, Moore, 39.

As Noyce put it in a letter
to Sherman Fairchild,

his aim was to "get close
to advanced technology again"

and to enjoy "more personal
creative work

"in building a new product,
a new technology

and a new organization."

MALONE:
The history of Silicon Valley is people going to startups,

leaving really nice jobs
that pay really well,

and taking this gigantic leap

to see if they can make
something important happen,

be valuable, and in the long run
maybe even get rich.

Noyce is the prototype of that.

The Noyces of the world didn't
get into this to have a job.

They got into this
to create a reality

and to be in control
of that reality,

even if it meant
giving everything up

and starting from scratch.

(faint voices over radio)

NARRATOR:
The images captivated the world.

On July 20, 1969,

12 years after the Russians
had shamed America with Sputnik

and just eight
after President Kennedy

had challenged the nation
to go to the moon,

there was astronaut
Neil Armstrong,

stepping onto the lunar surface.

ARMSTRONG:
That's one small step for man...

NARRATOR:
The scale of the achievement was obvious.

What was less apparent to the
half a billion people watching

was that the success
of Apollo 11

had hinged on the integrated
circuit technology

invented by Fairchild.

SPORCK:
At the time of the moon landing, I was in Paris on a sales trip,

and all of the TV stores
had the TVs on,

and there were pictures
of the Americans on the moon.

It was a very great,
patriotic feeling

as well as a feeling

that it's our technology
that's doing that.

It was a good deal.g

(crowd cheering)

MALONE:
1969 really is that miracle year

in 20th century
American history.

It's the moon landing;
it's Woodstock.

(guitar solo playing)

At the time we thought,
"Wow, these are epochal events

taking place around us
and we're here for it."

And even while they were
battling over People's Park

and rioting in the streets
in San Francisco

and protests at Stanford,

what we weren't noticing
just a few miles away

were the guys sitting
in laboratories

inventing stuff that really did
change the world

and will continue to change
the world for centuries to come.

NARRATOR:
By the time of the moon walk,

Robert Noyce and Gordon Moore
had been in business a year.

Starting up had been a breeze.

With their legendary status
in the industry,

they'd easily secured financing,

raising $2.5 million
in less than two days.

They'd also managed to lure
many of the best and brightest,

among them Andy Grove,

a Hungarian-born
chemical engineer

who had joined Fairchild's
R&D division in 1963.

Now, he would serve
alongside Noyce and Moore

as the new venture's
director of operations.

GROVE:
Bob didn't know me well enough to have a real opinion.

But Bob trusted Gordon,

and Gordon thought
I was pretty good.

MALONE:
The smartest hiring I think ever did in his life

was hiring Andy Grove,

because as good as the fit was
between Noyce and Moore,

there was one thing lacking,

and that was that drive
to make the company function

at its highest capability
on a day-to-day basis.

Neither one of those guys
was tough enough for that job.

ANN BOWERS:
aAndy was the guy who made sure the trains all ran on time.

He was a taskmaster.

He had very strong views
about what you should do

and what you shouldn't do,

and he was very direct
about that.

NARRATOR:
They'd called their new company "Intel,"

an abbreviation of
"integrated electronics,"

which also happened to conjure
the word "intelligence."

McKENNA:
It did not get a great deal of attention in the media,

but there was just a buzz,
particularly here in the valley.

There was an expectation that
they were going to do something

that was unique and different.

NARRATOR:
Believing computers to be the future

of the semiconductor industry,

Noyce and Moore had decided
to produce memory devices

and to challenge
the dominant technology,

magnetic core memory,

with a product based on
Noyce's integrated circuit.

They'd given themselves
two years to make a profit,

and the clock was ticking.

GROVE:
I had horrible nightmares.

Do all this with a ragtag crew

that never worked
with each other,

run by somebody
who never ran things like this.

I never took a business course.

I was inventing what to do
as we went along.

This was not easy.

NARRATOR:
Those first years, Noyce would later say,

were like "walking the thin line
next to the cliff of disaster."

Noyce found it exhilarating.

His mantra now was innovation,
and everything about Intel

had been designed
to encourage it,

from the companywide
stock options

to the open-plan office.

MALONE:
And I remember walking in at Intel headquarters,

and I couldn't find Noyce.

A secretary had to come out
and lead me to his cubicle,

because his cubicle
was almost indistinguishab

from all the other cubicles

in this vast prairie dog town
of cubicles.

Here's the living legend,

but he looked like
a middle manager

at a division of some Midwestern
manufacturing company.

BOWERS:
At Intel, there were no privileges anywhere.

We started a form
of company culture

that was completely different
than anything had been before.

You worked hard and delivered,

and that improved your life
in a variety of ways.

It was a culture of meritocracy.

NARRATOR:
For Noyce, Intel was an answer

to years of chafing at the
strictures of corporate life,

from his experiences at Philco
and Shockley Laboratories

to his dealings with Fairchild's
parent company.

TED HOFF:
The idea is people should not have to go up

through a chain of command.

If you need to talk
to a particular manager,

you go to him
and you talk to him.

To get away from the hierarchy

that was characteristic
of really large corporations

ere everything has to be done,
you know,

in a very rigid manner.

That very democratic society
was something that Bob promoted.

And then Andy found a way
to keep it,

but keep it with discipline.

MALONE:
The guys at the top, especially Noyce,

trusted the wisdom of all
the employees in the company.

In their minds, innovation
could come from anywhere,

and they were open to it
coming from everywhere

NARRATOR:
In thIn the spring of 1969, coulas Intel engineersre,

continued to tinker with
the design of their memory chip,

the fledgling company
scored a contract

that would alter its course.

The Janese firm Busicom
hired Intel

to design 12 specialized
microchips

for its new calculator,

and almost immediately,

a young engineer named Ted Hoff
raised a red flag.

HOFF:
The more I learned about this design,

the more concerned I became
that Intel may have undertaken

more than it was prepared
to deliver.

The number of chips
and their complexity

was much greater
than I had expected.

And Bob said, "Well, if there's
anything you can think of

to simplify the design,
why don't you pursue it?"

BERLIN:
Noyce always encouraged

the people in his labs
to run with their ideas

and see where they went.

NARRATOR:
Hoff's concept was radical; he envisioned a single chip

that could be programmed
for a specific application--

in this instance,
to function as a calculator.

Noyce saw the potential
for much more.

With Hoff's chip,
the guts of a computer--

a machine that in 1969

was still more or less
the size of a refrigerator--

could be shrunk down
to fit on a fingertip.

With a push from Noyce, Hoff's
invention would lead directly

to the world's first
microprocessor: Intel's 4004.

Introduced in 1971

and containing more than
2,000 transistors,

the device was advertised
as a "computer on a chip."

The digital revolution
had officially begun.

SANDERS:
Probably the most important invention

of the last hundred years
was the microprocessor,

which is basically
the fundamental driving force

and brain of all of the digital
equipment we use today.

Whether it's an iPhone,
a computer, you know,

a notebook,
you know, a tablet,

whatever it is, basically it's
built around a microprocessor.

MALONE:
That's the defining product of the modern world.

There's never been
a proliferation

of a new technology
that fast in human history.

MOORE:
It's been successful beyond anything

we possibly could have imagined
in the beginning.

And the result has
really revolutionized

the way people live.

SANDERS:
The microprocessor is now a $100 billion industry

and underlies the entire
ation technology world.

The microprocessor, of course,
is a collection of thousands,

hundreds of thousands,
now millions of transistors.

There's no way that those would
have been possible

without Bob Noyce's invention
of the integrated circuit.

MALONE:
I think you can credit Bob Noyce

for being the first
technology entrepreneur CEO,

in the sense that he built
a company

that was wholly dedited

to being on the absolute cutting
edge of technology, perpetually.

The zenith of that
is probably Apple Computer

in the 21st century.

The prototype for that is Intel
in the 1960s ands,

where you build a company that
is purely technology driven.

You're not even sure
what industries

you're going to be building for
after a certain point.

You're just driving
the technology forward

at breakneck pace

and seeing what emerges
from it all

and then coping with it.

It's a very, very interesting
business model

that never existed before
and really begins with Intel.

NARRATOR:
By the time Intel introduced the microprocessor,

the Santa Clara Valley
bore little resemblance

to the verdant farmland
it had been 15 years earlier

when William Shockley
set up shop.

The number of high-technology
jobs in the area

had increased tenfold
since 1959,

and the population of San Jose,
the valley's largest city,

had more than doubled
to nearly half a million.

As consumer applications
for the microprocessor

began to proliferate,
venture capitalists rushed in,

gradually replacing
the military and NASA

as the financial backbone
of the industry.

No longer would the area
be referred to

as the "Valley
of Heart's Delight."

After 1971--
that banner year for Intel--

it would increasingly be known
as "Silicon Valley,"

a name soon to be synonymous
with risk,

technological innovation

and a new brand
of the American Dream.

MALONE:
This valley is perpetually young.

It's always made up
of the next generation

of bright young entrepreneurs
showing up,

having
their "killing Dad" moment

of the previous generation
of valley executives,

and they start
their own companies.

We're not real big on history
around here.

We don't look back very much.

SANDERS:
In Silicon Valley, innovation is everything.

How are you different?

How are you better?

The rest of it is gut-busting,
hardworking engineering.

But the idea to do something
so different...

that's the magic of
Silicon Valley then and now.

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The foundation
also seeks to portray

the lives of men and women

engaged in scientific
and technological pursuit.

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American Experience:
"Silicon Valley"

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