July 16, 2003 7:25 AM PDT

Intel reflects on turning 35

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SANTA CLARA, Calif.--Intel President Paul Otellini has performed many tasks during his 25 years at the company, including helping to drive a forklift.
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Intel's top brass celebrate 35th anniversary
Craig Barrett, CEO, Intel; Gordon Moore and Andy Grove, co-founders, Intel

"We had to make the end-of-quarter shipments," he said. "The warehouse was across the street on Walsh Ave."

The chip giant celebrated its 35th anniversary Tuesday, and executives and longtime employees who gathered at company headquarters here to bury a time capsule agreed that Intel has gone a lot farther than anyone ever would have guessed. For a quarter century, Intel's x86 technology has provided the basic architecture underlying most PCs.

Thirty-five years ago, the semiconductor industry as a whole accounted for $1 billion in revenue, said co-founder Gordon Moore. Intel now garners that much revenue in a few weeks. Fifteen years ago, there were only 70 million PCs in use. Now, there are around 1 billion.

Tony Martinez was attending Foothill Junior College when he was hired to perform maintenance on some of the machinery work 33 years ago. "I was interviewed by (co-founder) Bob Noyce on a Friday," he said. "My first day on the job was Saturday."

Now, he serves as operations manager for Intel's research labs worldwide. Next month he's off to St. Petersburg, Russia.

In reality, the company almost wasn't. In the late 1960s, Noyce and Moore worked at Fairchild Camera and Instrument. The company had gone


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through two CEOs in six months, Moore recalled, and Noyce was next in line for the job.

Rather than promote Noyce, Fairchild appointed a three-person committee to manage operations and hired a recruiting firm to find a permanent replacement from the outside. Noyce decided to leave and asked Moore to help him start a new company.

"The first time I said 'nah,'" Moore recalled. "The second time he said, 'This time I really am leaving,' and I saw how things were really going to go at Fairchild."

The two then pooled $490,000 to found Intel. Venture capitalist Arthur Rock, who worked with the two in the 1950s at Shockley Semiconductor, put in $10,000. Later, Rock got investments from the other members of the "Traitorous Eight" who originally left Shockley to found Fairchild.

Silicon Valley--and job-hopping--were born. Advanced Micro Devices and other start-ups would soon calve off of Fairchild.

"There was a lot of opportunities out there, and Fairchild wasn't going to exploit them all," he added. One of Moore's recruits was Grove, a Fairchild employee he earlier had recruited out of graduate school. "I'm the only boss he ever had," Moore added.

Although Intel had no formal business plan initially, the hope was to achieve $25 million in annual revenue after five years, said Moore. It hit $63 million.

Part of the company's success has been through its ethos of "constructive confrontation," according to CEO Craig Barrett.

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"If you want to solve a problem, you don't dance around it," he said. At meetings, "there are people screaming, but they are not screaming at each other but at ideas."

One of the more visible symbols of Intel's managerial success, Barrett says, lies in its relations with Japanese companies. In the 1980s, Intel executives were flying to Japan to study that country's management methods. By the late 1990s, the Japanese were coming to visit Intel.

Like Moore, Barrett also almost didn't end up at the company. Barrett had been a professor at Stanford University before coming to Intel to work on a research project in the 1970s. After it was completed, he left to return to Stanford. "It was the middle of a recession. I thought this industry was crazy," he recalled.

But after five more months of academia, Barrett returned.

 

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