From Sputnik to Silicon Valley: The Evolution of the Semiconductor Industry
The fourth chapter of “Chip War” takes us back to the aftermath of the launch of Sputnik by the Soviet Union in 1957. This event created a crisis of confidence in the US, leading to a crash program to catch up with the Soviet’s rocket and missile programs. President John F. Kennedy’s declaration that the US would send a man to the moon led to an increased demand for guidance computers for the Apollo spacecraft. This provided an opportunity for companies like Fairchild and Texas Instruments, who saw the potential in integrated circuits, to provide their chips to NASA.
Robert Noyce, the co-founder of Fairchild, discounted prices for customers besides NASA, while Pat Haggerty of Texas Instruments saw the potential for Kilby’s integrated circuit to be used in all military electronics and made a successful bet on selling chips to the military.
The Minuteman II contract transformed TI’s chip business, with shipments to the Air Force accounting for 60% of all chip sales by 1965. The success of the Apollo computer was largely due to Noyce’s chips and the endorsement from NASA, while the military contracts from the Pentagon transformed TI’s chip business. The question remained whether TI could mass-produce the chips to meet the demand.
The fifth chapter introduces us to Jay Lathrop, an MIT graduate with experience working in a U.S government lab, who joined Texas Instruments (TI) on September 1, 1958. This was shortly after Jack Kilby’s productive summer spent in TI’s labs. At the time, Lathrop was grappling with the challenge of miniaturizing mesa-shaped transistors. His innovative solution was to use a microscope lens in reverse, effectively shrinking the image of the object under observation. This process, which came to be known as photolithography or printing with light, enabled him to manufacture transistors that were significantly smaller than before, measuring only one-tenth of an inch in diameter and 0.0005 inches in height.
Recognizing the potential of Lathrop’s process, Pat Haggerty and Jack Kilby saw its value as far exceeding the $25K prize offered by the Army. They understood that the use of light rays could mechanize chipmaking on an unprecedented scale. However, implementing lithography at TI necessitated the development of new materials and processes. This included purchasing their own centrifuges to ensure the purity of chemicals, creating their own masks due to a lack of precision elsewhere, and sourcing ultra-pure silicon wafers that were not available elsewhere.
Mass production of components presented challenges due to impurities, variations in temperature and pressure, and contamination by dust particles. In response, TI conducted thousands of experiments to evaluate the effects of different temperatures, chemical combinations, and production processes. Morris Chang played a crucial role in improving TI’s manufacturing yield through his methodical approach, while Mary Anne Potter conducted round-the-clock tests to scale up chip production for the Minuteman missile.
Meanwhile, at Fairchild Semiconductor, Robert Noyce hired James Nall from Lathrop’s lab to develop photolithography. Andy Grove, a refugee from Hungary’s Communist government, worked on enhancing their manufacturing process. While William Shockley, the inventor of transistors, was awarded a Nobel Prize for his contribution, it was engineers like Chang who, through trial and error, transformed these inventions into practical products. By the mid-1960s, their efforts had enabled the mass-market productization of these technological advancements.
The sixth chapter of “Chip War” highlights how Bob Noyce, a co-founder of Fairchild Semiconductor, recognized the significance of the military and space applications to the company’s early success. However, Noyce also envisioned a much larger civilian market for integrated circuits. To tap into this market, Noyce declined most military research contracts and focused on developing mass-market products from chips used in rockets or satellites. The first integrated circuit produced for commercial markets was designed for a NASA satellite and used in a Zenith hearing aid. Despite the presence of defense contractors, the Pentagon underestimated the speed at which startups like Fairchild would transform electronics due to their agility compared to big bureaucracies.
Gordon Moore, the director of Fairchild R&D, not only devised new technology but opened new civilian markets as well with his prediction of exponential growth in computing power, known as “Moore’s Law.” Moore realized that the integrated circuit would revolutionize society beyond just rockets and radars. The military demand for features in chips that were also useful for business applications led to a surge in civilian chip sales. Robert McNamara’s defense reforms resulted in Fairchild offering off-the-shelf integrated circuits at significantly lower prices, thereby expanding the market for chips.
By 1968, the computer industry was buying as many chips as the military, and Fairchild’s products served 80% of this market due to Bob Noyce’s price cuts. The Apollo 11 mission used a guidance computer powered by Fairchild’s integrated circuits. However, Silicon Valley engineers had become less reliant on defense contracts as the booming chip market became their focus. This financial success fueled the progress of Moore’s Law while employees sought ways to make money from it. Even Noyce himself considered leaving the company at some point.
The seventh chapter of “Chip War” introduces us to Bob Noyce, a renowned inventor who revolutionized the electronics industry with his invention of the integrated circuit at Fairchild Semiconductor. At the same time, the Soviet Union and the United States were competing in various fields, including semiconductors and their role in transforming manufacturing, computing, and military power. Anatoly Trutko, a Soviet semiconductor engineer, arrived at Stanford University for a student exchange program during the Cold War. Trutko studied under William Shockley, who was upset that the USSR refused to pay royalties for the Russian translation of his textbook.
The USSR assigned its smartest scientists to work on building its semiconductor industry, including Yuri Osokin who was tasked with building an integrated circuit with multiple components. Osokin and his colleagues spent their time in the lab and debating solid-state physics, and Soviet leader Nikita Khrushchev was obsessed with competing with the United States. Alexander Shokin, a Soviet State Committee on Radioelectronics official, saw an opportunity to use Khrushchev’s urge to compete to win investment in microelectronics.
The USSR had a secret weapon in the form of a spy ring led by Julius Rosenberg, which included Joel Barr and Alfred Sarant, electrical engineers and members of the Communist Party. During the 1940s, Barr and Sarant worked on classified military systems and gained knowledge about electronics before fleeing the US to reach the Soviet Union. In the Soviet Union, Barr and Sarant told KGB handlers they wanted to build the world’s most advanced computers and eventually built the first computer called UM.
Barr and Sarant partnered with Shokin to convince Khrushchev to establish a city devoted to producing semiconductors, and dreamed up their own version of Silicon Valley in a Moscow suburb. Sarant and Barr, former spies, showed Khrushchev the cutting-edge advancements in Soviet microelectronics and presented the idea of a futuristic city dedicated to producing semiconductors, which Khrushchev enthusiastically endorsed. The Soviet government approved the plan to build a semiconductor city in the Moscow outskirts, called Zelenograd, which was designed to be a perfect scientific settlement with all amenities for semiconductor engineers. The Moscow Institute of Electronic Technology, a university, was near the center of Zelenograd and resembled American and English college campuses.
In conclusion, the chapters four through seven of “Chip War” provide a comprehensive account of the evolution of the semiconductor industry during a time of intense global competition and rapid technological advancement. The narrative takes us from the aftermath of Sputnik’s launch, through the invention of photolithography and the mass-market productization of these technological advancements, to the shift from military to civilian applications of integrated circuits, and finally to the Soviet Union’s efforts to build its own semiconductor industry.
The chapters highlight the key figures and events that shaped this industry, offering a deep understanding of the technological, economic, and geopolitical factors that drive the chip industry. The narrative underscores the role of visionary leaders like Robert Noyce, Gordon Moore, and Jay Lathrop, the impact of defense reforms and military contracts, and the influence of competition between the United States and the Soviet Union.
The chapters also shed light on the challenges and opportunities that these pioneers faced, from the complexities of miniaturizing transistors and mass-producing components, to the potential of integrated circuits and the burgeoning civilian market for these chips. The narrative also reveals the strategies and innovations that these pioneers employed to overcome these challenges and seize these opportunities, from the development of new materials and processes, to the invention of photolithography and the prediction of exponential growth in computing power, known as “Moore’s Law.”
Furthermore, the chapters illuminate the broader social and cultural context in which these developments took place, from the crisis of confidence in the US following the launch of Sputnik, to the student exchange program during the Cold War, and the establishment of a city devoted to producing semiconductors in the Moscow outskirts. The narrative also highlights the role of institutions like NASA, the Pentagon, and the Moscow Institute of Electronic Technology, and the influence of individuals like Anatoly Trutko, Yuri Osokin, and Alexander Shokin.
Overall, these chapters of “Chip War” provide a fascinating insight into the evolution of the semiconductor industry, the pioneers who shaped it, and the global competition and rapid technological advancement that drove it. They underscore the transformative impact of these developments on manufacturing, computing, and military power, and their enduring legacy in the form of the digital revolution and the rise of Silicon Valley.
