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Get Four
|  | SEPTEMBER 29, 2004
Recalling Intel's Early "Nightmares" Chairman Andy Grove talks about the outfit's journey from shaky startup to chipmaking titan, and the spirit at the heart of innovation In the tech world, few people are better known than Intel (INTC ) Chairman Andy Grove. Once dubbed Time's Man of the Year, Grove's iron will and visionary thinking helped the chipmaker survive many scrapes. Within a year, he's expected to step down as chairman and become chairman emeritus. BusinessWeek technology correspondent Cliff Edwards interviewed Grove in mid-September to talk about some of the highlights of his career and the innovations that came out of working with Intel co-founders Robert Noyce and Gordon Moore. Following are edited excerpts of their conversation: Q: I was interested in the era of Busicom. It strikes me that it was an inspired or very lucky move to win back the rights to sell microprocessors. A: Oh, [the story] has been told many times, but I don't know if it was ever written up. The timing was about 1970. We were busily struggling to make early versions of the first 1K DRAM (memory chips) and had our hands full with product difficulties, technology difficulties, not unlike things that you're busy writing about recently. In comes an obscure Japanese company called Busicom with blueprints for the design of an 11-chip package of custom circuits [to be used for calculators]. [Then Intel CEO] Bob Noyce went to Ted Hoff and said: Is there a way you can simplify the plans so we can design them? And Ted Hoff sat down with paper and pencil and a bunch of diagrams and came up with the idea that a general purpose CPU programmed with ROM would be able to represent a combination of four circuits, four chips, all the functions that the Busicom people wanted. In terminology of later years, he basically came up with the idea of a programmable microprocessor. It was a custom circuit to Busicom, so they owned all the rights. Someplace, somewhere, [amidst] the thinking between Ted Hoff and marketing, the possibility came up: If we can take the four chips and combine them this way and that way and that way, we've got a whole family of calculators, [and] there may be other applications for it. And the utility of this started to dawn on Bob Noyce and then the marketing manager, Bob Graham, who has also passed away. The two got on the plane and went to Japan and negotiated to get our design and intellectual property back in return for some product discounts. The rest, of course, is history. It was luck, combined by what my colleague Robert Burgelman of Stanford [University] calls strategic recognition. But not immediate strategic recognition, a delayed one. Q: What was the inflection point for you guys? Here was a company that, by all rights, should have succeeded, but you guys went through a lot of financial straits. A: Why did we have so much trouble? We were doing a hard job. We survived the second half of the 20th century, [which saw] incredible development and growth of technology and marketplace. [The market] changed its nature from discreet integrated circuits, which was the mainstream when we started, to memories and microprocessors and consumer electronics. All this within the span of 30 years was an incredible development. The question isn't why we had so much trouble. There were 100 companies that started in that business. Who's alive? A handful. And who has grown to be commensurate with that market? Only us. A number of companies started later in the game and rode along successfully from the time we entered to today. But from the beginning of the LSI era, the large-scale integrated-circuit era, to today, there are very, very few companies that have navigated it. It's very hard to sustain, adapt, and prosper in the cross currents of a developing technology. If it's hard to make a success out of something, it's an order of magnitude harder to sustain the success for exactly the kind of thing we're talking about. It's a testimony to Intel's institutional character that by dealing with each of these technology twists and turns and market twists and turns, we fought our way out of this pitfall and that pitfall -- and we're still alive and kicking. We're arguably doing better than that. But surviving and thriving in that business might have been the hallmark of a great company.
BW MALL
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