The Fairchild Semiconductor Story Part 2

was important, the transistor being the big thing and its role. Basically, a lot of the stuff that fair Child made was they were components that would go into other people's products. So it's not necessarily the stuff that you or I would buy. Yeah, it's not usually straight to consumer unless you happen to be building your own big, fancy computers, in which some people were certainly, you know, but for most of us, we are buying the stuff that fair

Child semi conductors would be inside already. But any way, let's get back to what they were doing. So we're getting into this era now where we're talking about UH semiconductor chips that whether they were specific tiny little components or they were full microprocessors, we're getting tiny, tiny, tiny elements on smaller and smaller scales, and as we made smaller components, it meant that it became much more important

to control the environment within which these components were built. Right, So if I am making a chip today, you know, I'm talking about creating a chip that has components that are on the nano scale there maybe maybe a couple of dozen nanometers wide. So if, for example, a speck of dust, which is pretty small, get it. Uh, it's bad times. Yeah, no, you're ruining an entire possibly multiple microprocessors, you know, depending upon where that moat of dust falls.

Because while a motive dust to us is very very tiny compared to the nanoscale, that thing's an enormous asteroid heading for Earth that's going to wipe out all life, right, I'll technological semiconductor life. You have to get a nano sized Bruce Willows to drill a hole and put a nano sized nuclear weapon in there to destroy it. Or you can build what's called a clean room. So clean rooms are you know, they are what they sound like.

Clean rooms are designed to have as few contaminants as possible. Ideally you've got no contaminants in there. You have people wearing those crazy suits that like hazmat suits. It's designed to cut down on any sort of fibers or dust that you could give off, um, including things like dead

skin cells, which creates a lot of dust people. Uh. You also have really advanced filtration systems that filter the air, that that circulate the air multiple times within the span of an hour and really try to filter out any kind of particulates that could cause problems during the manufacturing process. And this is part of part of the process of manufacturing that fair Child was was instrumental in developing, right, because again, their work really meant that the whole industry

was being pushed forward. You get at this time in fair Child's history, we're talking about the mid seventies right now. Uh, there were a lot of companies that were in the semiconductor business. Now some of them had already kind of split directly from fair Child, and a few had crashed and burned. You know, we had Motorolas. Semiconductor industry didn't last for much longer. Uh. There were being cannibalized by

fair Child, right. Yeah, there were other companies that also worked in semiconductors and then decided that that business was not profitable for them, and they got out, but you still had big companies like Texas Instruments sent there. He had Intel that was was really started. Um fair fair Child. Meanwhile, I was having a little bit of of rocky times around around that period. They had they had lost some

of their upper management. There had been a bunch of layoffs, right, so they were looking to try and maybe strike out there and do something really really innovative. And they did and it didn't work. It was it was nine and the fair Child Video Entertainment System or v e S

and later called the Channel S it launched. This was the first programmable cartridge based video game system, right Yeah, Everything that had come before it was essentially a hardwired system, meaning that whatever games were on the system, that was it. That's all the games you got to play. Because they were hardwired. You could not PLoP a cartridge out and put something exactly. I had a game of Pong where

there were eight different versions of Pong. It's all essentially the same game, just slightly so slightly different that it was almost like I cannot tell what how tennis and table tennis are different. Anyway, This was a different approach. It was creating the first cartridge based ROMs. Where you could have a game on a cartridge and you could pull it out and put in a different game and have a completely new experience. And it was the first one totally predated the Atari. Yeah, so here we go.

Why isn't it not a Why is it not a huge success? Well, they didn't have that much support. They only ever made I think twenty six games for the thing, and it was probably a little too early. I mean, it just it, it came out, came out. It was a little half baked, I guess, compared to some of the later systems, and so it never got the traction that other systems got. By the way, you can still find fair Child video entertainment systems on things like Craig's List. Uh,

there are a few museums that have them. When I was at E three this past year and when we're recording this, when I was at the three, they had a video game um history section of one of the show floor part of the show floor, and they had a fair Child entertainment system there. Not that I played it. I was too busy playing Rampage. But anyway, Uh, yeah,

it was not a big success for fair Child. It was one of their rare attempts to create something scifically for consumers, not the enterprise, or not for some other manufacturer. Moving ahead. In ninety nine, another big year for fair Child. That's when an oil field services and electronics company called

Schlumburger Limited, when I just love that name. Schlumburger came in and uh met up with fair Child Camera and Instrumentation Company and set up, Hey, this semi connector business you've got, you know, the one that's not working so well, we'd like to take that off your hands for four million, Yeah, between four hundred and four hundred fifty million, depending upon which way you read the reports. But yeah, a significant,

a significant investment. They said, well, we'll buy this for around four hundred million dollars in nineteen seventy nine, and so they bought the company and hardly anything happened at first, Like they bought it and it just kind of, you know, kept chugging along, but there wasn't anything. Everyone was hoping for something big, yeah, some big change. So some people started to call the new company something else besides fair Child.

Since the parent company was Schlumberger, they called it slumber Child because it was snoozing. So the parent company eliminated many compensation and benefits packages that fair Child had established over the course of its existence, which meant that several key employees wound up leaving. Yeah. Yeah, when you tell your employees, yeah, you know this bonus program you guys have, that's not really what we do, so we're cutting it.

That does not help employee moral. I know that this is ground shaking news here that someone Oh you mean, eliminating a program makes people upset. Yeah, well, Schlumberger found that out, and they saw more talented people leave the company. Now, keep in mind, at this point, by the time Schlumberger came in, there were none of the original members of

the fair Children at fair Child anymore. They had all gone off to In fact, Gordon Moore and Robert Noyce were two of the last ones to leave, so they had all gone off to either work four or found their own companies. But even now with the second round, like the Hogan's Heroes era, those guys were starting to leave to were skipping ahead quite a bit. But this

is when fair Child introduced something interesting. Now keep in mind, even though the company was having trouble, they were still introducing new innovative stuff in the world of electronic components, and in fact, we haven't touched on a lot of them because frankly, you know, it would be like they came out with this other transistor and you know it would mean nothing to you, right right. I mean basically, it's all just like getting more stuff onto smaller chips

and making it without making it more power hungry. Exactly. You just summed it all up, Lauren, that really is what it was all about. And in fact, in they introduced the fair Child Advanced Sea Moss technology. UH. Sea moss stands for a complementary metal ox side semiconductor and they the short version of this. The acronym in this case is fact F A C T and UH. This is something that's used in microprocessors, micro controllers, other digital

logic circuits. And it was meant to to increase processing speed but keeping that power consumption level. And it performed really well against other logic approaches and what was becoming a very crowded semiconductor market. Now on the executive front, Slumberger decided to bring in someone from Texas Instruments. In fact, many people from Texas Instruments. In fact, so many people

from Texas Instruments. Essentially, they were doing the same sort of thing at Texas Instruments as what fair Child had done to Motorola a few years ago. They brought in so many managers and executives that some people in the industry, who we've already learned, we're really hilarious calling its slumber Child earlier, decided it's no longer slumber Child. Now they're

calling it Texas Instruments West or t I West. That that they had taken so many people that really they were just another branch of Texas Instruments at that point. And eight six they created the first Sea Moss non volatile electrically erasable memory, which sounds really complicated, but it's actually a pretty simple concept. It basically just means that that the computer's memory can retain information even when the power has been shut off. Yeah, that's what non volatile means.

It means that once and this is really important obviously for things like personal computers where you need that read only memory to always have that specific information. The way you retain that specific information is you create this non volatile electrically erasable memory. Now, electrically erasable does mean that you can wipe out the memory that's on that particular microprocessor, but you do so at a higher voltage than what

would typically be produced in say a computer. So in other words, I can use my computer all the time and not worry that the wrong information is going to get wiped out. Also, I'm not going to change that

it's read only. It's designed to be there and stay there and keep it stable, so that no matter what else I do at my computer, that's going to remain the same, unless I were to remove it and subjected to higher voltages, in which case I could erase what was on there and then program it a new and then put it in there, and then it would have a new type of read only memory that would work or not work despite whether or not there was electricity

running through my machine. So very important in the development of computers obviously, um and so there was a good a good development at fair Child. On the management front, things were still not working so well. Ah. Yeah, this brings us to to seven, which was when um Schlumberger tried to sell fair Child, but I think they were

blocked by the government, right, Yeah. I was trying to sell them to a Fujitsu Limited, a Japanese company, and the United States government blocked that that that acquisition essentially, which can sometimes happen. That's when you hear about these really big, big, big corporate deals, how the government can get involved in either approve or deny. This was a denial. Do you West government said, you know, you do not

sell fair Child off to a Japanese company. So instead they ended up selling it to another American company called National Semiconductor Corporation for only a hundred and two million dollars um, which estimates have said that Schlumberger invested like like one point five billion in the company during the

short period that it was. That was its owner, right right, So Schlumberger bought the company for between four hundred four and fifty million, had invested about one point five billion dollars, sold it for one and twenty two million, making this

one of the biggest busts in technology history. You know, we've talked about some of the other ones, like some deals that seemed like they were good ideas at the time and then turned out to be a really bad idea, like you know, purchasing MySpace for hundreds of millions of dollars only to find out later that Facebook was the learner. Yeah,

same sort of thing here. Um, you know, Schlumberger bought the company and then just really depending upon whom you ask, really, it seems like the most people say they just didn't know what to do with it. They just didn't know how to manage it properly. So it was handed off to National Semi Conductor Corporation, which, by the way, was founded by lots of different folks, including some people who had worked for a fair Child way back in the day.

So um, yeah, big bad news for Schlumburger. Anyway, National Semi Conductor had been founded in nineteen fifty nine. Uh, some of them were Some of the founders were employees who had worked at semi Conductor division of the Sperry Rand Corporation. Now parts of Sperry Rand are part of Unicis and some are part of Honeywell. So as I say this, you know, these might be company names that

you've heard in passing. They have a lot of pretty tight and contentious relationship with each other because there are a lot of talent that have worked at one or the other, or sometimes multiple industry considering. Yeah, so anyway, some of them were founders from from fair Child, and uh, National semi Conductor would eventually be acquired by a different company in two thousand eleven. Another one we've already mentioned

Texas Instruments. Yeah, now, while Texas Instruments acquired National semi Connector, they did not acquire fair Child. But after and in a minute, yes, in a minute. Uh, And so we're gonna jump from eight seven to ninety four. Now, the reason why we're making this big jump is that again National semi Connector was trying to see if they could maybe get Fairchild to become a much more profitable, efficient organization. And keeping in mind, fair Child was still producing stuff.

They just the company itself was kind of in a mess um. But in ninety four, fair Child introduced what was called the Cross volt l c X Low Voltage Logic series, which had over voltage tolerance. Anyway, they also created what was called a plug and play i S A bus adapter, which is i s A stands for Industry Standard architecture. And you might wonder, well, what the

heck is a bus? If you aren't familiar with electronics or computers, you might you know, a bus kind of you know, white, is that what you put the computer on to take home. Or is it the communications system within the computer? Yes? Yeah, a BUS is essentially a kind of communication system, and it can be inside a computer. It can actually be between computers. But it allows data to go from one part of a computer or to another,

or between one computer and another. So really, bus is just this kind of shorthand for saying, this is the system that allows data to go from one place to another. Now we've gotten into some pretty crazy times over at fair Child. We've got National Semiconductor there, uh that has ownership of fair Child. But things are about to really change for the company. Before we get into that, though,

let's take a quick break to thank our sponsor. Alright, So fair Child has been through its share of of drama, right, We had just just the founding of fair Child was dramatic. Then we had the old era of the fair Children moving away when they became disenchanted with the company. You had the Hogan's Heroes era, you had Schlumburger coming in, you had National Semiconductor in n something else happens right that.

That's ten years after National semi Conductor came in, fair Child Semiconductor was spun off into its own independent company based in South Portland, Maine. Yep, that's why the headquarters are there. And not keep in mind fair Child was originally one of the Silicon Valley UH companies. Now it's technically a main company, but it created this South Portland UM facility just a few years after they had had

been founded. And then UH it doesn't get acquired UH with National semi Conductor in twenty eleven when Texas Instruments by his National semi Conductor. The reason is because it had been spun off into its own company. However, many of the the assets that fair Child Semiconductor had originally owned, like it had fallen under their Child semi Conductor ended up going with National semi Conductor. They ended up taking many of the production facilities that fair Child had had.

Fair Child kept a couple, including the one in Maine and one in Pennsylvania, as I recall UM. But this opened up a new era for fair Child to really kind of focus and try and reassert what its corporate identity was and to UH try and get a leadership role in the industry again. So they started to make some pretty bold moves, a lot of acquisitions. In fact, one of the first ones that they acquired was Samsung's power device division, So this was a division within Samsung itself,

obviously not a full company. And that's another interesting thing just about corporations in general, is that sometimes you don't get a full acquisition. They just say, hey, this one thing that you do, we want that, can we can we get that, which is way more complicated than monopoly. So until there comes site like like hostile take over the board game, I'm just really not going to understand this. And frankly, all of my real estate information comes from

a monopoly, which probably explains a few things. But but this, this, this was a terrific purchase for fair Child because because Samsung was was creating components that fair Child was was putting into its own components. And so and uh Kirk kirk Pond was the president's CEO of fair Child at that point, and um, and he said about this purchase, everyone else is saying that their systems on a chip company.

We're not, and we're proud to be a multi market supplier. Yeah, and that, you know, that was kind of their entire strategy at that point, right. Yeah, They also wanted to diversify as much as they possibly could and not. They didn't want to be so concentrated on one part of the industry that if something were to happen, Let's say that someone was to come up with a an industry changing discovery that would make certain parts of electra obsolete. If that's the one thing your company does, you are

out of luck. So diversification really important. In two thousand, fair Child launched the Interface and Logic Group, which was a division meant to create hardware for Internet and wireless applications, because you know, two thousand, that's that's not quite a decade into the Internet era for the general public. Yeah,

you know. Of course, research facilities had been playing with this stuff for years and going nana nanna, except they were typing it and using lots of as key art, but the rest of us were largely ignorant of it. Well two thousand, of course, now we're getting the part where this is really starting to become a phenomenon, and fair Child so we can't ignore this. We have to make sure we incorporate this, and might we might have waited too long in fact, and the company also started

making more acquisitions. They acquired a company called qt up to Electronics. They also acquired Cota micro Circuits, and they also acquired the power management division from I Grow Linear and uh so this is, you know, another example of how they were really trying to be bold and to to diversify as much as possible. They launched something called the moss FET b g A package. And now I'm going to explain what that is. So moss FET stands

for ms f ET. It stands for metal oxide semiconductor field effect transistor, So doesn't that clear it all up? And b g A stands for ball grid array. Now, what a ball grid array is essentially a different way of creating those little interconnection pins that you use to plug various electronic components into stuff. Now, the ball grid array allowed you to create more of those interconnections to

create greater throughput. Right, So you're you're increasing the processing power of various components by giving more connections between that and the other elements that are in whatever you're talking about, whether it's you know, a mobile phone or a computer or whatever. Right. And and this is one of those, yeah, one of those miniaturization uh techniques right that that has that that basically has helped make mobile phones possible. Yeah,

the whole more processing power, less power consumption. That's really what we're going at here. So again they're still showing that they're very innovative in that space. Now, two thousand and five, they introduced a chip that helped reduce while it was a signal line reduction for mobile handsets, and again it was one of those things that makes mobile handsets much more uh, much more powerful, and much more useful in the hands of consumers. Uh. It also consumed

very little power. It was a very small and very light chip, which made it ideal for mobile use because obviously the bigger and heavier it is, the less likely it's going to be a useful component for something where you're carrying it around with you all the time. And that's also when the fair Child got a new CEO who is now the current CEO, Mark Thompson. He becomes CEO, and he had previously been executive vice president of Manufacturing and Technology uh over at Fairchild, so they had promoted

him from within. But before that he had also been an executive at Tycho Electronics and and also rake him Electronics as well. As I want to say it was big Bear, but I don't have it in my notes. But as I recall, that's also who he was with, so he had a long history of working in the industry before he even joined Fairchild. But he joined Fairchild as an executive and was promoted to the role of CEO in two thousand five. Two thousand seven, that's when

the company celebrated fifty years of being a company. They had been founded in nineteen fifty seven, and so there was a three day celebration held at the Computer History Museum and I think like like two thousand um fair Children showed up. Yeah, so people from the very earliest days of fair Child ended up showing up at this and it was really a celebration of the company. People had panels and talked about what it was like in

those early days. Uh. And we'll talk a little bit more about the Computer History Museum, uh, because they have a really some cool exhibits, or at least some cool archives of stuff that came from fair Child. Now, in two thousand eight, CEO Mark Thompson also became the chairman, so he's chairman and CEO at that point. But that was also the year that the company announced they were going to make a twelve percent cut in workforce which was around eleven hundred jobs. So not all good news

for the company and uh. In fact, in two thousand nine, fair Child announced plans to close the production facility they had in Pennsylvania, which would eliminate a further two hundred jobs. But then in two thousand eleven they reversed that decision

um and began actually hiring instead. Yeah, within the course of the couple of years when they had announced it and when they were actually planning on shutting it down, fortunes had changed a bit for the company and they were able to reverse the decision, which came as a great relief for that community in Pennsylvania. In two thousand and twelve, the Computer History Museum accepted a donation from

another company. They got a donation and at unred patent and laboratory notebooks written by employees of fair Child semi Conductor. But the donation didn't come from fair Child semi Conductor. Came from Texas Instruments. Yeah. Now you're like, how did Texas Instruments get them? Okay, so you remember we mentioned National semi Conductor. They had owned fair Child for a while, right,

and then they spun off fair Child. When even you know, National semi Conductors said, we can't do anything with this company, We're gonna spin them off. So National semi Conductors spun them off, but they kept a lot of stuff, including these historic documents, these old archive documents. They were all from nine three, right, and they had illustrations, including technical illustrations, and some cartoons and stuff in them as well. I've seen some pictures of the stuff that was in there.

It's really the story of the semi conductor industry in a way, but told in the actual history of innovation. So it's like seeing stuff get invented right in front of your eyes if you're reading through these things. It's it's been called the the Founding Documents of Silicon Valley. Super cool stuff for a particular Okay, yeah, I think

it's super cool. I also don't get out a lot, but anyway, it's it was donated by Texas Instruments, who of course that that was the company that had acquired National semi Conductor in two thousand eleven, right, and so that was a big big move there. Nice But so yeah, this this more or less brings us up to today. Ish revenue as of twelve was one point four billion, for fair Child semi Conductor small shakes, not too not

too shabby. Um, it's a they're employing about nine thousand people right now and again not necessarily um for for direct consumer consumption. But but but their products are used in in computers and and industry and electronics, cars, medical devices, mobile devices, network communication. Uh yeah, I mean it's And if you want to know some of the other companies that were founded by the fair Children, we talked about

two of them already. Intel and National Semiconductor were both founded at least in part by former fair Children and also Advanced micro Devices or a m D. So I'm sure many of you have heard that company name as well. Um. And one less little interesting note historical note. So, the building that first house the fair Child Semiconductor Company back in nineteen fifty seven was not a garage like like

HP and an actual building. Yeah, but it is a building that has been made California Historical Landmark number one thousand in Palo Alto, California, So it is an official historical landmark of California. You can go and I'm sure I think there's a plaque out front that explains what it is. So it's a it's got its place in history at least until the next big earthquake, because California gets this, right, I've heard about that. Yeah, I don't

know anything about that. We just get tornadoes here, which, by the way, that's enough. That's okay. Yeah, yeah, we're doing fine. Yeah. So anyway, that wraps up our story about fair Child. It's really an interesting story, I think, mainly because you had so much innovation going on and there was still like this sort of political drama going on within the company itself, and I have a feeling like the engineers were probably caught in the middle there.

They really wanted to push forward the whole industry and create new devices and really discover things. I mean, it seemed to me like the joy of just learning how to create new things was a big part of what made them who they were, But because of the way the company was run, it didn't always align with that. So you know, we see that from time to time.

It's pretty interesting stuff. I think if you guys have any suggestions for future topics of tech stuff, whether it's another tech company or some other type of things that maybe you just always wanted to know how electric toothbrushes work. Let us know you know. You can write us our email addresses tech stuff at Discovery dot com, or you can drop us a line on Facebook or Twitter or handled.

There is tech stuff h W and Lauren and I will talk to you again really soon for more on this and thousands of other topics, because it how staff works dot com