Ch 5: Mortars and Mass Production (Chip War)

• Bob Noyce recognized the importance of military and space applications to Fairchild Semiconductor’s early success, but he also foresaw a much larger civilian market.
• To create this market, Noyce declined most military research contracts and instead 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 surrounding defense contractors, the Pentagon underestimated how quickly startups like Fairchild would transform electronics due to their nimbleness compared to big bureaucracies.
• Under Gordon Moore’s direction at Fairchild R&D team 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 rockets and radars.
• The military demanded features in chips which were also useful for business applications, leading to a boom of civilian chip sales.
• Robert McNamara’s defense reforms resulted in Fairchild offering off-the-shelf integrated circuits at drastically lower prices, creating an expanded market for chips.
• By 1968, 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.
• Apollo 11 used a guidance computer powered by Fairchild’s integrate d circuits; however Silicon Valley engineers had become less reliant on defense contracts with booming chip markets becoming their focus instead .
• This financial success drove Moore’s Law forward while employees looked for ways to make money from it – even cofounder Bob Noyce started considering leaving the company himself eventually .

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