47. National security argument: SIA, “Trade and National Security,” in The International Microelectronics Challenge: An American Response by the Industry, the Universities, and the Government. Proceedings from a conference held 10–11 March 1981, in Washington D.C., G2, SIA.
48. Preliminary determination: International Trade Administration [A-588-504], “Erasable Programmable Read Only Memory Semiconductors From Japan; Suspension of Investigation,” Federal Register, Vol. 51, No. 151. 6 Aug. 1986, 28253. Gordon Moore recalls that the price of the leading EPROM chip dropped 90 percent—from $30 to $3 in the nine months before the preliminary findings were issued. Fair market value was defined as a company’s cost of production, plus an 8 percent profit.
49. SIA most effective: Pollack, “Small Lobby’s Large Voice.”
50. Outcome of proposed Fairchild sale: Richards, “Bottom Line Indicated Who Would Buy Fairchild.” Charlie Sporck says, “We bought Fairchild Semiconductor, with all of that company’s properties, for $122 million. … [W]e gradually sold off parts of Fairchild for more than $150 million, and then we sold the remains of the company to new owners for $500 million!” Sporck, Spinoff, 238.
51. Cessation of dumping has helped: Michael Feibus, “Is the Chip Pact Working? U.S Chip Makers’ Profits are Up, but Agreement May Not Deserve Credit,” San Jose Mercury News, 24 August 1987.
52. Economies and societies are the laboratories: Noyce, “False Hopes and High-Tech Fiction,” Harvard Business Review, Jan.–Feb. 1990.
53. I am spending more time: Noyce to Grant Gale, 17 Dec. 1985, Grant Gale Papers, GCA. National saving rate: Noyce, Remarks to the Central Iowa Junior Achievement Business Hall of Achievement Annual Banquet, 29 March 1990.
54. Microelectronics is giving us: Noyce, Microelectronics and the Information Society [speech to various universities], 31 March 1983. First principles: Noyce, Remarks to the Central Iowa Junior Achievement Business Hall of Achievement Annual Banquet, 29 March 1990.
55. On Censtor: Ed Zschau, interview by author; Kip Hagopian, interview by author. Collective individualism: Noyce, International Competition in Electronics—An American View [speech delivered at Financial Times Conference on World Electronics, London, England], 11–12 May 1981 Rope each other in: Arthur Rock, interview by Evan Ramstad, 19 May 1997, courtesy Evan Ramstad.
56. On Volant: Hank Kashiwa, interview by author; Bucky Kashiwa, interview by author.
57. Other small investments: Rock to Noyce, stamped “rec’d 3 Dec. 1980,” ASB. On Diasonics: Noyce and Rock holdings: Diasonics IPO Prospectus, 23 Feb. 1983; Largest offering since Coors: Gary Putka, “Diasonics Debut On Wall Street Cheered by Investors,” Wall Street Journal, 24 Feb. 1983; Problems: “Diasonics’ Waxman Quits Two Leading Posts at Firm,” WSJ, 20 Nov. 1987; Diasonics Inc. Agrees to Settle Litigation by Paying $12 Million,” WSJ, 4 June 1987; Fred R. Bleakley, “The Volatile World of Medical Imaging,” New York Times, 27 Nov. 1983; Nathaniel C. Nash, “2 Charged In Insider Trading,” NYT, 31 Dec. 1986.
58. Development team members: Peter H. Lewis, “Heroes of Information Revolution,” New York Times, 14 Nov. 1989. Foreign-born population doubled: Analee Saxenian, Silicon Valley’s New Immigrant Entrepreneurs (San Francisco: Public Policy Institute of California, 1999): 11. 75 percent Asian: Sevilla, 278. One-quarter of engineers: Analee Saxenian, “Networks of Immigrant Entrepreneurs,” in Chong Moon Lee et al., The Silicon Valley Edge: A Habitat for Innovation and Entrepreneurship (Stanford, Calif.: Stanford University Press, 2000): 249. Unless otherwise noted, Teresi is also the source for information on Caere.
59. Even if he was blasting you: Ken Oshman, interview by author.
60. The Apple endorsement: Martin Mazner, executive vice president for ComputerWare, quoted in Ken Siegmann, “Caere Plans Initial Stock Offering,” Macintosh News, 18 Sept. 1989. $10 million sales: Bob Teresi to author, 18 Oct. 2004, citing 1989 annual report and IPO prospectus.
61. Year’s five most successful: Clipping, probably from the San Francisco Examiner, undated, Caere scrapbook, courtesy Donna Teresi. Noyce’s nearly 400,000 shares: Caere IPO Prospectus, 19 Oct. 1989, courtesy Bob Teresi.
62. Land of opportunity: unidentified clip of Noyce speaking [probably when he received the National Medal of Technology in 1990] included in “Remembrance of a Life Well Lived,” video, ASB.
63. Noyce travels: Mar Dell Casto, Maryles Casto, Kathy Cohen, Bill Cohen, Judy Vadasz, interviews by author. Balloon tours: Copy of form and check from Noyce ordering a video cassette “Ballooning in Europe,” 22 Nov. 1985, ASB.
64. May 1984 China trip: “Intel Corporation Delegation Visit May 21–May 31 [1984] to People’s Republic of China,” [detailed itinerary], ASB; “Zhao Ziyang Meets US Scientist,” China Daily, 26 May 1984, ASB. Potato chips and scotch: Ann Bowers, interview by author, 22 June 2002.
65. Doodles: file marked “RNN—Doodles!” none of the contents dated but apparently from the mid- to late 1980s, ASB.
66. 6,500-acre ranch: Sean Flavin to Noyce, 29 Nov. 1982, ASB.
67. Estimates of Noyce flying time: Noyce to Diane Labrador [Intel], 24 Feb. 1984, ASB. Noyce quotes on flying and the personal computer: Noyce, transcript of “The Machine that Changed the World,” IA.
68. All Jim Lafferty quotes: Jim Lafferty, interview by author.
69. Noyce’s flight-school experience: Jim Lafferty, interview by author.
70. Ten-year waiting lists: Kristin Downey, “Getting Off the Ground, Investors are Determined to Build a Private Air Terminal at S.J. Airport,” San Jose Mercury News, 23 Jan. 1986. Go ahead and do it: Jim Lafferty, interview by author.
Chapter 12: Public Startup
1. Innovation not fostered by committee: Noyce quoted in United States Senate, “Uncorrected Transcript of Proceedings, Committee on Banking, Housing, and Urban Affairs: Subcommittee on International Finance, Oversight Hearing on Trade and Technology in the Electronics Industry,” (Washington, D.C.: 15 Jan. 1980) 113–115, SIA.
2. Destroy the prices: Charlie Sporck, interview by author.
3. Working group participants: Advanced Micro Devices, AT&T, Digital Equipment Corporation, Hewlett-Packard, Intel, IBM, LSI Logic, Micron Technology, Motorola, National Semiconductor, NCR, Rockwell International, and Texas Instruments. These companies, plus Harris Corporation, were the founding members of SEMATECH.
4. Three competing agendas: this discussion relies heavily on Browning and Shetler, SEMATECH, 60–62.
5. Grandiose scheme: Craig Barrett quoted in Browning and Shetler, SEMATECH, 55. Annual R&D budget: Robert Noyce, “Remarks to the DARPA Lab Directors Dinner Meeting,” 14 March 1990, ST.
6. Three-phase goal: Advisory Council on Federal Participation in Sematech, SEMATECH: Progress and Prospects 1989, ES-2, ST; SEMATECH Strategic Overview, December 1991, D-2, ST; 1989 SEMATECH Operating Plan, 3, ST.
7. To provide: SEMATECH Web site: http://www.sematech.org/public/corporate/history
8. High-tech barn raising: Miller Bonner, interview by author.
9. Noyce spoke to House and Senate: Noyce, “Testimony on National Technology Development and Utilization Provided to the Technology Policy Task Force Committee on Science, Space, and Technology, 25 Sept. 1987, IA; Noyce, “Testimony Before the Senate Committee on Government Affairs Regarding Senate Bill 1233, ‘The Economic Competitiveness, International Trade, & Technology Development Act of 1987,’” 9 June 1987, IA.
10. Implications are awesome: “Memorandum for the Secretary of Defense,” United States Defense Science Board Task Force on Defense Semiconductor Dependency, Report of Defense Science Board Task Force on Semiconductor Dependency (Feb. 1987).
11. Bias in defense science boards: See, for example, Favoritism and Bias Within the Defense Science Board and Other Military Advisory Panels (Hearing Before a Subcommittee of the Committee on Government Operations, U.S. House of Representatives, 98th Congress, September 22, 1983). There was a disagreement in Congress as to whether the Department of Commerce (favored by the House of Repr
esentatives, as well as several industry leaders who had worked with Secretary Malcom Baldridge) or Department of Defense (favored by the Senate) would be the appropriate government agency to fund and work with SEMATECH. The House had put together a Trade Resolution in support of SEMATECH, and the Senate had passed a Defense Appropriations Bill. Ultimately, the president’s Economic Policy Council, which had expressed dislike of industrial policy (and thus of Commerce’s involvement) recommended that Defense participate in Sematech in the interest of national security. This recommendation, coupled with the practical reality that the Defense Department already had funding mechanisms in place for high-technology grants, swung the decision in the Defense Department’s favor. Browning and Shetler, SEMATECH, 29, 51; Miller Bonner, interview by author, 4 Feb. 1999.
12. Wildly overstated: Peter Waldman, “Chip Makers’ SEMATECH Venture Rushes to Vanquish Foe, but Path is Questioned,” Wall Street Journal, 8 Jan. 1988. Department of Commerce raised questions: Congressional Budget Office, The Benefits and Risks of Federal Funding for SEMATECH, Sept. 1987, 46.
13. Most are right-wing Republicans: Willman, “Congress Cool to Chips Aid.” Pleading for a handout: Robert J. Samuelson, “Chip Industry’s Plea,” Washington Post, 24 June 1987.
14. Perception they represent: Senator John McCain quoted in Louise Kehoe, “Chip Makers Ask Congress for Help,” Financial Times of London, 5 March 1987. SIA refused to commit to location: Charlie Sporck, interview by author. To sidestep anticompetitive issues, the SIA designed SEMATECH to fit within the parameters of the National Cooperative Research Act of 1984 (an act the SIA had championed).
15. SEMATECH is a bargain: Noyce, “RNN SIA Speech 12/7/88,” ST.
16. Site-selection process: Miller Bonner, interview by author; Charlie Sporck, interview by author. Committee’s expectations are from Browning and Shetler, SEMATECH, 43.
17. National Governor’s Association task force: State Activities to Encourage Technological Innovation: An Update (Feb. 1982). “Prepared for the National Governors Association Task Force on Technological Innovation,” iv, ST. High-tech companies offer salvation: Location of High Technology Firms and Regional Economic Development (1 June 1982). “A staff study prepared for the use of the Subcommittee on Monetary and Fiscal Policy of the Joint Economic Committee, Congress of the United States,” v. Thanks to Margaret O’Mara for pointing me to international visitors to the Stanford Industrial Park. Excellent discussions of early technology regions include Margaret O’Mara, Cities of Knowledge: Cold War Science and the Search for the Next Silicon Valley, (Princeton, N.J., Princeton University Press, 2004) and Stuart W. Leslie and Robert H. Kargon, “Electronics and the Geography of Innovation in Post-War America,” History and Technology, Vol. 11, 1994, 217–231. For an international discussion, see Rolf Sternberg, “Technology Policies and the Growth of Regions: Evidence from Four Countries,” Small Business Economics 8 (1996), 75–86.
18. Advertisement for Albuquerque: San Jose Business Journal, 25 Sept. 1989. In a bid to attract entrepreneurs, the advertisement stressed the relatively low cost of labor in Albuquerque—average weekly earnings of $347 versus $451 in San Jose. For an excellent sample of a variety of regional advertisements, see “Special Report: Industrial Development/Site Selection,” Electronic Engineering Times, 9 Nov. 1981.
19. Austin added 10,000 jobs: Thomas C. Hayes, “Is Austin the Next Silicon Valley?” New York Times, 13 Jan. 1988, 6. Common as a Lone Star beer: Mary A. C. Fallon, “Roping High Technology—Texas Cities Trying to Tie Up Silicon Valley Business,” San Jose Mercury News, 1 July 1985.
20. Austin’s offer: “Texas City’s Persistence Pays in Battle to Snare SEMATECH,” Boston Globe, 27 Jan. 1988. California’s fractured bid: Douglas Shuit, “Deukmejian Quietly Bids for High-Tech Study Center,” Los Angeles Times, 5 Sept. 1987.
21. California in danger: Tom McEnery quoted in Louise Kehoe, “SEMATECH Blow to Silicon Valley,” Financial Times of London, 8 Jan. 1988.
22. AT&T and IBM Manufacturing Demonstration Vehicles: Browning and Shetler, SEMATECH, 58–59. For more on the public announcement of the MDVs, see SEMATECH Web site: http://www.sematech.org/public/corporate/history and “IBM, AT&T Contributing Technology to SEMATECH,” Los Angeles Times, 27 Jan. 1988.
23. Three leaders: Jim Peterman (Texas Instruments), Sandy Kane (IBM), and George Schneer (Intel). They stacked 500 people: Bill Daniels quoted in Browning and Shetler, SEMATECH, 93.
24. More damn guys promoted: Charlie Sporck, interview by author.
25. DARPA delayed funding: Jack Robertson, “Report DARPA Presses Sematech,” Electronic News, 25 April 1988; Robert Ristelhueber, “Sematech Chairman: We’ll Decide R&D,” Ibid.; Jack Robertson, “DARPA Gets Sematech Voice,” Ibid., 16 May 1988. Senate threatening to trim: “Bob Noyce Created Silicon Valley and Now He’s Asked to Save It,” Physics Today, Sept. 1988, 50; Andrew Pollack, “SEMATECH’s Weary Hunt for a Chief,” New York Times, 1 April 1988, 1. No right-minded executive: Richard Bambrick and Robert Ristelhueber, “Sematech CEO: Why No Takers?” Electronic News, 23 May 1988.
26. Find someone better: Robert N. Noyce, “SEMATECH Presentation, Washington Press Conference, July 27, 1988,” IA; Otis Port, “Bob Noyce Created Silicon Valley. Can He Save It?” Business Week, 15 Aug. 1988, 76. Prefer not to see life’s work: Noyce quoted in “Living Legends, Profiles from the National Business Hall of Fame [1989],” ST.
27. Noyce-Hodgson conversation: Richard Hodgson, interview by author.
28. Noyce-Sporck conversation: Charlie Sporck, interview by author.
29. Beautiful music together: Charlie Sporck, interview by author. Not expecting fun: Interview, Robert Noyce, Regarding his Work at SEMATECH, IA. Net worth: calculation based on number of Noyce’s shares times share price in June of 1988.
30. Too important to ignore call: Noyce, SEMATECH Presentation, Washington Press Conference, 27 July 1988. Noyce walking the edges of his Christianity: Mar Dell Casto, interview by author.
31. Public startup: Robert N. Noyce, “SEMATECH Presentation, Washington Press Conference, July 27, 1988,” ST.
32. Ideal guy: Sporck quoted in Carrie Dolan and Eduardo Lachica, “SEMATECH Names Intel’s Noyce to Head Semiconductor Industry Research Group,” Wall Street Journal, 28 July 1988. Congressional reaction: “Bob Noyce Created Silicon Valley and Now He’s Asked to Save It.” Turkey farm: Dolan and Lachica, “SEMATECH Names Intel’s Noyce.” Nothing like hiring a legend: “Chipping In To SEMATECH,” San Jose Mercury News, 29 July 1988.
33. Reactions to Noyce’s decision: Richard Steinheimer to Noyce, 30 July 1988; Arthur Rock to Noyce, undated; M. Kenneth Oshman to Noyce, undated; Bill Davidow to Noyce, 29 July 1988; Andy Grove to Noyce, undated; all ASB. “Gordon Moore Interview, 8/17/94,” IA.
34. Limit consortium to American firms: http://www.sematech.org/public/corporate/history
35. Wrapped in the flag, Iwo Jima image over the top: Miller Bonner, interview by author.
36. Sixty-nine people: list of VIP section for November 15 dedication, ASB. Throughout the history: Noyce, “RNN/Dedication,” 10 Nov. 1988, ASB.
37. Mr. Outside: Interview, Robert Noyce, regarding his work at SEMATECH, IA.
38. Office of chief executive: SEMATECH Operating Plan 1989, 6, ST.
39. Split loyalty: Interview, Robert Noyce, regarding his work at SEMATECH, IA.
40. Don’t open your mouth: Miller Bonner, interview by author. Meeting drew 32 lawyers: Browning and Shetler, SEMATECH, 32. Nothing to extract from: Interview, Robert Noyce, Regarding his Work at SEMATECH, IA.
41. Noyce going around conference table: Miller Bonner, interview by author.
42. Noyce removed his tie: Browning and Shetler, SEMATECH, 82–83.
43. Budget meeting story: Miller Bonner, interview by author.
44. Business cards: Miller Bonner, interview by author; Dan Seligson, interview by author. Organization chart: Turner Hasty, interview by author.
45. From our base of shared knowledge: Noyce,
“National Advisory Council on Semiconductors, Remarks by Dr. Robert N. Noyce,” 8 Mar. 1989, ST.
46. Virtual vertical integration: Noyce quoted in “Partnering for Total Quality,” (“Prepared by SEMATECH for the U.S. Semiconductor Industry”), vol. 1, 15 Jun. 1990, 1, ST. Vertical integration of 80 percent of Japanese consortiums: Grindley, Mowery, and Silverman, SEMATECH and Cooperative Research, footnote 15.
47. 88 percent small businesses: A Strategic Industry at Risk, 12.
48. Supplier-manufacturer relations: An excellent survey from the late 1980s is Government Accounting Office, SEMATECH’s Efforts to Strengthen the U.S. Semiconductor Industry.
49. Manufacturer’s perspective: Turner Hasty to author, 11 August 2000.
50. Friendlier lawsuits: Turner Hasty to author, 11 August 2000. Ovation: Browning and Shetler, SEMATECH, 37.
51. D-A-R-P-A: William Spencer, interview by author.
52. Fab construction records: SEMATECH Operating Plan 1989, 15. SEMATECH and industry standard fab costs are from Browning and Shetler, SEMATECH, 86.
53. Agonizing indecision: Ann Bowers, interview by author, 16 Aug. 2004. Weak link: Noyce quoted in Darrell Dunn, “SEMATECH Chief Details Exec Rift,” Electronic News, 3 April 1989. Under the terms of a three-year employment agreement, SEMATECH continued making salary payments to Castrucci. Might run more smoothly: Noyce quoted in Kirk Ladendorf, “SEMATECH Could Grow With Fewer Members: Downsizing May Help Consortium Function Smoother,” Austin American-Statesman, 19 Jan. 1992.
54. Deliver occasional speeches: “Big Bang, Paris, RNN Talking Points,” 12 April 1988, IA; “RNN Talking Points, Cowen Investment Group,” 22 June 1988, IA; “RNN, Intel: Preparing for the Challenges of the 1980s,” CIS Summit Talk, 19 July 1988. 58 speeches: Miller Bonner, interview by author.
55. Noyce-Bonner conversation: Miller Bonner, interview by author.
56. Many masters: Interview, Robert Noyce, regarding his work at SEMATECH, IA.
The Man Behind the Microchip Page 56
