October 30, 1998

The Man Who Sparked The IT Explosion

Eric Ellis, Mountain View

From a nitro-glycerine obsessed kid in a small fishing town to IT impresario and billionaire... Intel founder Gordon Moore built his career by making an extraordinary claim then developing the technology to back it up

IF GORDON Moore pursued his childhood impulses with the same enthusiasm he had for his teenage tinkerings, the world today would be a different place. We'd possibly be blowing each other up rather than sending each other e-mails, as Moore showed a particular talent for school-lab explosives. Bill Gates might not be fighting the Courtroom Battle of the New Millennium over control of the internet. And this Grand Old Man of Silicon Valley might be several billion dollars poorer, instead of being Forbes magazine's richest Californian with a $US7 billion fortune. You could probably throw in a fourth possibility: that Silicon Valley as we know it today probably would not exist, with all the implications for the US and world economy that scenario suggests.

"I think you are probably exaggerating my contribution a bit," says the modest, plain-speaking co-founder of the computer chip leviathan Intel. "Intel has been a tremendous effort of some very talented people."

Human behaviour is governed by some famous "laws" - Murphy's and the one of averages, for example. Most of them are cliches. Thirty-three years ago - a few years before Moore founded Intel with fellow visionary Robert Noyce in the "wilderness" of a citrus orchard alongside the then free-flowing Route 101, one of the country's oldest freeways - Moore created a law that has become legend among world techies.

He predicted that after every 18 months manufacturers would double the capacity of transistors on a computer chip, and that the chip would remain the same price.

"Moore's Law" was a simple remark in a trade journal, but the implications of what he wrote were astounding at the time. Remember, this was when black-and-white TVs, rotary-dial telephones and automatic transmission were considered high-tech.

In effect, Moore was making the heretical prediction that computers - those big clunky behemoths that were the stuff of sci-fi and James Bond -would become part of everyday life, simply by suggesting there'd be a constant demand for the chip which was its heart, its brain and its blood.

That the chip would not increase in price was a double shocker, because it suggested there'd be a lot of them.

As Intel marks its 30th anniversary, Moore's prediction (which has since stretched from 18 months to two years) has proved uncannily accurate. That's in large part because his company has made and sold most computer chips since that time, starting with the world's first Dynamic Random Access Memory device (Moore coined the term), the "1103", in 1970. It has become the undisputed emperor of the technology heap, controlling as much as 90 to 95 per cent of the industry.

Has the proving of "Moore's Law" been hard work, or a self-fulfilling prophecy? Moore, of course, says the former, but the fact is that Intel is one of those extremely rare companies: if it didn't exist, someone would have to invent it. Moore calls it "getting on the right horses".

Intel has fitted neatly into the pattern of where the world was, and is, going. General Electric might provide power and television, Coca-Cola soft drinks, General Motors cars and BHP minerals, but so do lots of others, corporate variations on a similar theme. But Intel is unique, and so damned successful at being unique, generating profits of $US7 billion in 1997 and $US25 billion in revenues. Too much so for US authorities, who are investigating the company on anti-trust grounds, a move remarkable in the country which is the modern Mecca of capitalism.

Without Intel, Microsoft would not exist in the way we know it today. There'd be no "Wintel monopoly", Windows would be panes of glass and Bill Gates might be the bespectacled CEO of a moderately successful Seattle-based lemonade company.

"Think about some of the great inventions that have really driven the world's economy. You have steam, you have electricity, you have the railroads," says Daniel Niles, an analyst with BankAmerica Robertson Stephens in San Francisco. "Semiconductors and PCs are the sort of thing that change the world and the way we work. And Intel is at the heart of that industry."

Intel is such a quintessentially Californian story. It was spawned in the State that symbolises and then embodies the New World of the New World, where the flow of ideas starts in the west, in a citrus orchard, or for personal computers, in Mum's garage, and then heads east to Wall Street and the mass market.

California is an immigrant State - as evidenced by a casual wander through Intel's multinational head office - but Gordon Moore is a rare animal, a true Californian from the fishing hamlet of Pescadero (Spanish for fisherman) on the central coast, where he was born 69 years ago. Faithful to the old Intel-inspired gag about the computer miniaturisation firm that was so successful it shrank itself out of business, Moore remembers Pescadero "as the only town in California that's smaller now than it was 50 years ago".

He always seemed to have a penchant for innovation. "I was at junior high school and I built myself a fairly extensive lab at home; turned out production quantities of nitro-glycerine. It takes something to keep kids interested; for me it was explosives. I got A for a mark and E for conduct," Moore says.

Intel was founded with a $US245,000 investment on July 18, 1968, by Moore and Bob Noyce, friends who had split away from the so-called Fairchild Eight, the

co-founders of Fairchild Semiconductor, a forerunner in integrated circuitry and arguably Intel's corporate godfather. The two were soon joined from Fairchild by Andrew Grove, then known as Anders Graf, a Hungarian immigrant with a determination to make good his American Dream.

Noyce died in 1990 and his photographs and life story adorn Intel's lobby at Sunnyvale, just outside San Francisco. Today, Moore and Grove are the company's eminences grises. Grove is the business brain, communicator and marketer who was honoured by Time as its 1997 Man of the Year. He stepped down as executive chairman late last year in favour of Craig Barrett.

Moore holds the status of what might be called Boffin Emeritus, as did Noyce when he was alive. They were the arch-technicians who conceived the product that Grove went out and sold.

Grove's supporters within Intel describe Moore as "having a superb business brain", although Moore himself says "no-one ever accused me of being a salesman. I'd have starved to death as a salesman." He has stood on the doorstep of modern technology, while today's giants of the industry with names like Gates, Jobs, Wozniak, Chambers and Barksdale came cycling by peddling their wares.

He remembers the first time Steve Jobs came by his office with one of the earliest Apple personal computers. "I thought they were a good idea. Steve was a great salesman even then, though there wasn't one of our chips inside," he recalls. "He started off with kind of an oddball chip. They got off on the wrong foot and they've never gotten back on the right one. They're still not using our chips."

Moore first met Bill Gates in 1980. "He was a very aggressive young kid," he says. "My first contact was in a phone conversation when he was very upset about something that Intel had supposedly done. He read me the riot act up and down. We straightened it out eventually.

"Gates is an unusual character. He's very smart and very pragmatic; he can still turn Microsoft around very rapidly. Microsoft is much more nimble than Intel. There's not the huge capital investment out there to worry about.

"We don't have unions and when we are overseas we avoid them if we possibly can. We need the flexibility to be able to change rapidly and that's one thing most unions want to take away from you. You can never predict it out very far, but that's the one thing that's been constant in this business - the pace of change."

The future is something that Moore is comfortable talking about. The rate of change in technology still astounds him, even after 69 years - most of them spent in a high-tech world.

"There is a tremendous intellectual and commercial desire to go to the next thing and that's what drives the change," he says. "It's a phenomenally elastic market, more than any other market I know. One of the great advantages of our industry is its ability to change. The bigger firms can switch direction in two to three years, the smaller firms even less. Compare that with the big oil companies and industrial giants."

The bubble that has formed in the corporate rush to the internet doesn't worry him too much: "The market will take care of the froth. Its not obvious what the next vehicles are. A bunch of these companies seem to be way over-valued."

And what about Moore's Law, the credo that the speed of the industry will double every one to two years?

"It'll go that way, doubling every two years for another decade or so, then we get into some technology problems and then it'll probably become every four years," he says.

"Moore's Law will pan out a little bit."