Page 62 - EE Times Europe March 2022

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The Roots of Silicon Valley, Part 3: Startup Fever and Venture Capital

IC markets, first with its µLogic RTL family expense of the semiconductor division. The more complex, large-scale parts with 30 gates
and then with its 930 series DTL. In April company suffered its ultimate humiliation in or more, instead of simpler, small- and
1965, Gordon Moore famously published his July 1967, when the semiconductor industry medium-scale devices under 30 gates — a
article “Cramming More Components onto fell victim to the first of its cyclical recessions, strategy that was proving popular and suc-
Integrated Circuits” in Electronics. Later to during which the company lost money and cessful with engineers. The move forced Texas
be known as Moore’s Law, it was basically an was forced to concede its technology leader- Instruments to recognize the threat and copy
extrapolation of four plots on a graph show- ship to Texas Instruments. all of Fairchild’s 9300 Series parts under
ing IC transistor density over time. 74 series numbers (for example, the 9300
Fairchild’s digital technology lead was, became the 74195 and the 9341 the 74181.)
however, being overtaken by Texas Instru- Sanders’s entire strategy collapsed, how-
ments. Having fallen behind in RTL and ever, when Hogan capitulated to Ken Olsen,
DTL, Fairchild’s chief rival decided to copy founder and CEO of Digital Equipment Corp.
Sylvania’s ultra-high performance (SHUL) and a key Fairchild customer. Olsen wanted
transistor–transistor logic (TTL) circuit Fairchild to give up on its proprietary TTL
design, adapting it to its own process to technology and instead second-source Texas
counter the announcement of Fairchild’s Instruments’ 74 Series TTL. Against
third-generation 9000 series TTL logic. Sanders’s wishes, Hogan agreed, signing the
Headed up by Stewart Carroll, Texas death warrant for Fairchild’s TTL strategy.
Instruments set up a “design factory” that Sanders was, understandably, livid. “You’ve
could churn out several new designs a week, just killed the company, Ken,” he fumed.
mostly by guessing the W/L ratios, laying out Hogan’s betrayal was the last straw for
the circuits, correcting them if the prototypes Sanders. He, together with a group of Fair-
did not work, and zeroing in on a specifica- child engineers, quit to start Advanced Micro
tion that manufacturing could support. The Devices. When Sanders was installed as pres-
design factory was supported by an optical ident, one of his first moves was to establish
photomask generator, as opposed to a manual the mantra: “People first, revenues and profits
rubylith layout, that could quickly create a will follow.” Sanders also gave every employee
photographic chip layout, as well as a “quick stock options in the new company, an innova-
turn” fab line to churn out parts. tion at the time.
Wilf Corrigan, who had moved with Hogan
TTL DATA BOOK to Fairchild as director of Discrete Product
To strengthen its attack, Texas Instruments “The TTL Data Book for Design Engineers” Groups, succeeded Hogan as president and
masterminded a marketing coup by per- CEO in 1974. Fairchild continued to decline,
suading other semiconductor companies to however, dropping to sixth place in the semi-
second-source its TTL rather than Fairchild’s Charles Sporck, Noyce’s operations manager conductor industry by the end of the decade.
competing product. In this single masterly — often credited with running the industry’s In the summer of 1979, with the semi-
move, Texas Instruments established its tightest ship — left in early 1968 along with conductor market again riding high on its
74 Series version of TTL as the de facto Pierre Lamond to join Widlar and Talbert fourth year of successive double-digit growth,
third-generation industry standard, leaving at National Semiconductor. That triggered Fairchild fell victim to a hostile takeover bid
Sylvania’s SHUL, Fairchild’s 9000 Series, Noyce’s and Moore’s departures that same from Gould, a major U.S. producer of electrical
and other proprietary alternatives behind. year — a pivotal moment in the eventual and electronic equipment, hell-bent on a
It then proceeded to neutralize the entire demise of the firm. The collective exodus of diversification strategy.
second-source movement by providing Sporck, Noyce, and Moore, along with so many Unable to fend off the buyout, Corrigan
every engineer with a copy of its ubiquitous other executives, signaled the end of an era, sought the best price for shareholders. Fair-
orange book (“The TTL Data Book for Design prompting Sherman Fairchild to bring in a new child was eventually sold to Schlumberger,
Engineers”). Its twice-yearly “must attend” management team led by C. Lester Hogan, then a French oil services industry company, for
TTL seminars, not just in the U.S. but globally, vice president of Motorola Semiconductor. US$350 million, or US$66 per share (Gould
were supported by an aggressive new product Of the eight original founders, only Julius went as high as US$57 per share).
introduction program. Blank remained, although he, too, would be Schlumberger was unable to revive the
By always ensuring any bill of materi- gone within a year. deteriorating company, and it continued to
als included at least one TTL part that was lose money. Corrigan departed in
available only from Texas Instruments, the HOGAN’S HEROES February 1980, and once his non-compete
company was able to stay one step ahead of Hogan’s arrival, and the subsequent displace- clause expired, he and Rob Walker co-founded
the competition and own the TTL market for ment of Fairchild managers, demoralized the ASIC pioneer LSI Logic Corp. in 1981.
the best part of 30 years, until standard logic company even further, prompting a further Schlumberger initially replaced Corrigan at
eventually fell victim to the 1980s exodus of employees who would launch a host Fairchild with one of its own managers, Tom
application-specific IC revolution. of new companies. Leading a group dubbed Roberts, who unsuccessfully ran the firm like
In the meantime, starved of capex, Noyce’s “Hogan’s Heroes,” the ultra-conservative a heavy-equipment company. Two years later,
position on Fairchild’s executive staff was Motorola executives immediately clashed with in 1983, it recruited Donald W. Brooks, a Texas
consistently being undermined by Sherman Sanders, Fairchild’s flamboyant sales chief. Instruments veteran, to reverse its decline. By
Fairchild’s corporate interference and his lack While initially slow to respond to the then, Fairchild was a legend in trouble, lag-
of support. The Fairchild management team changing market under Sanders’s direction, ging in leading-edge technologies and losing
was increasingly upset by Sherman’s corpo- Fairchild had embarked on a strategy of leap- money, even as the rest of the semiconductor
rate focus on unprofitable ventures at the frogging Texas Instruments by focusing on industry was booming.

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