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Andy Grove and the Rise of the World's Most Powerful Chip Company
By Tim Jackson
Dutton 424pp $24.95

Through a mix of extraordinarily hard work, ruthlessness, and just plain luck, Intel Corp.'s executives have, in just 29 years, made it the world's No.1 chipmaker. Its market capitalization is greater than the Big Three auto makers' combined. The company so dominates microprocessors--and indeed the entire computer industry--that federal investigators have just launched a probe to determine whether Intel exploits its near-monopoly for unfair gain.

Such is the context for a fascinating look inside one of the most secretive companies in high tech. In Inside Intel, Tim Jackson offers a keyhole view of the company's history, laced with remarkable detail and sometimes shocking revelations about its business practices. (The title is a play on the company's ''Intel Inside'' marketing slogan.) Jackson, a former reporter for The Economist and the Financial Times, buttresses his deep reporting with a profound grasp of Intel's strategy, which he explains in clear and lively prose.

Jackson's thesis is that Intel was largely shaped by the personality of one man: its brilliant, mercurial chairman and chief executive, Andrew S. Grove. Although not one of Intel's founders--those were Chairman Emeritus Gordon E. Moore and the late Robert N. Noyce--Grove was a powerful force in the company almost from the start. Through dozens of examples, Jackson shows how Grove's behavior and values have formed Intel and propelled its rise to dominance. But while there's ample evidence of the CEO's forcefulness, Jackson doesn't seal the case that, as he says, ''Intel is the personal creation'' of Grove. Too many others have fashioned this company that has become, in many respects, the role model for much of Silicon Valley.

The book's other drawback is that it stops too soon: Except for an epilogue that updates Intel's story through last May's filing of a patent-infringement suit by Digital Equipment Corp., the tale ends around 1993, the time of the Pentium-bug crisis. While Jackson does a fine job of laying out the company's history and its evolution into a chip powerhouse, enough has happened in the past four years to merit more attention. Jackson may have been stymied by Intel's unwillingness to cooperate. Indeed, he says, the company early on told employees not to talk to him.

Inside Intel begins and ends with the story of the Pentium bug--the same event that kicks off Andy Grove's own Only the Paranoid Survive. After a user found a bug in the chip, Intel at first downplayed the problem before finally bowing to public pressure and agreeing to exchange the defective parts. Jackson sees Intel's stonewalling and its ultimate reversal as emblematic of Grove's mixture of arrogance and pragmatism.

''Did the Pentium scandal reveal something important about Andy Grove and the company he ran?'' Jackson asks. The author tries to answer that question through an exhaustive recitation of anecdotes. He describes a company driven by enormous attention to detail and a confrontational culture where directness is prized. One chilling story recounts Grove's parting words when chip pioneer Federico Faggin left Intel to found Zilog. ''You will fail in everything you do,'' Jackson quotes Grove as saying. The author adds that Faggin was ''shaken by the almost medieval brutality of these words.'' Grove's sense of betrayal at defections eventually gave rise to many Intel lawsuits against former employees.

That's just one example of an aggressive style that Jackson amply documents. He unearths Intel's penchant for keeping as trade secrets the serendipitous discoveries made in its labs, despite an industry tradition of patenting and sharing advances through scientific papers. He describes instances of alleged insurance fraud, which included suppression of documents and knowing misrepresentation, committed in Intel's Malaysian plant. He charts the KGB-like behavior of Intel's internal-security force, which once even went through the garbage of an employee suspected of stealing leftover gold from an Intel factory. And he reveals fascinating details of the company's longstanding rivalry, and sometime alliance, with Advanced Micro Devices Inc., a relationship that has included a nearly ceaseless string of lawsuits.

Fortunately, the book's appeal extends beyond mere voyeurism: It deftly chronicles the rise of the Andy Grove school of management. Like a modern-day Frederick W. Taylor, Grove believes that everything in management can be quantified and improved through the application of stringent methods. To this, he adds a mix of paranoia, personal obsessiveness, and doggedness. Although this mentality wasn't enough to fend off some of Intel's mistakes, such as the demise of its memory-chip business in the mid-'80s or an ill-fated venture into digital watches, it does indeed lie at the heart of Intel's success. While Jackson notes the huge role that sales and marketing have played in Intel's success, he's wise to assert that Grove's operational focus has set Intel apart.

Inside Intel may be a bit too detailed for some general-interest readers. And it might have benefited from more analysis, especially about the company's addiction to the treadmill of product obsolescence and upgrades. But anybody interested in a juicy tale of high-tech empire building will find this book fascinating--and a little disturbing.



PHOTO: Cover, ``Inside Intel''


Updated Oct. 2, 1997 by bwwebmaster
Copyright 1997, Bloomberg L.P.
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