as the highest-capacity semiconductor memory device currently available in the world.
Karp and Vadasz had been assigned to turn Hoff’s one-cell circuit diagram into a working part. They had already produced one chip design – a part called the 1102, which was sold as a custom project to Honeywell, the customer for Intel’s original bipolar chip. It was their second version, the 1103 chip, that Reed was soon told to work on. Partly because of the complexity of the chip’s design, the first prototype wafers that came off the line did not contain a single working circuit. Reed spent a number of months on the project, fine-tuning the design and the manufacturing process before finally coming up with something that he believed would be manufacturable.
When Reed arrived in the fab area late one night to see the first prototypes of his new design roll off the line, Gordon Moore was waiting for him.
‘Reed, you screwed up,’ he joked. ‘Only seventy-five working dice per wafer.’
Achieving a yield of nearly 50% was thrilling news. Noyce and Moore were totally confident that, with further improvements to the design and the process, the manufacturing cost of the 1103 chip could soon fall to a point where Intel could sell it for $10.24 – a penny a bit. Computer makers would complain that this new dynamic semiconductor memory was more complex to work with than old-fashioned core memories. But it was smaller, much faster, and used much less power. And if its price per bit was lower than that of core memory, DRAM would conquer the world.
A delegation was hastily sent over to Massachusetts to persuade Honeywell to abandon the 1102 project and to put its backing behind the 1103. Three people went: John Reed, someone from sales, and Bob Noyce himself. When the presentations began, the Honeywell engineers were highly dubious. They had been cooperating with Intel for many months on the 1102, and the part was designed precisely in order to meet the requirements of Honeywell computers. Why should they throw away this work and switch to a product that Intel would soon be offering to all comers?
Essentially, Intel had two answers. The engineering answer was that the 1103 design, for all its additional complications, was proven to be easier to manufacture. This meant not only that it was more reliable now, but also that it offered better technical improvements in the future. The marketing answer was based on cost. Because of the manufacturability advantage, the 1103 was already considerably cheaper to build than the 1102 – and the gap would only widen. But the Honeywell engineers remained unconvinced.
It was only when Noyce, the father of the integrated circuit, began to speak that they sat up in their seats. Talking without notes or preparation, Noyce repeated some of the points that his colleagues had already made. What he said was in itself not new. But Noyce’s presence, his aura of authority, his seductively deep voice, won the day. Honeywell signed up to the 1103, and the three men returned triumphant to Mountain View in the knowledge that Intel could now focus all its efforts on developing a single memory product.
The launch of the new chip, in October 1970, proved to be a turning point in the history of the computer industry. As we’ll see, it was by no means a perfect product. But by undercutting the price of core memories, the 1103 established semiconductor memory as the technology of choice for computer makers from 1970 onwards – and set the industry on a familiar path of falling costs, rising performance and diminishing size. As the price of semiconductor memory fell over the coming decades, it would become cost-effective to build memory into lots of other devices too. Demand for memory products would become a multi-billion-dollar market – a market that Intel could legitimately claim to have created single-handed.
Noyce’s success at Honeywell was typical of his talents, and proof that he was admirably qualified to be Intel’s first CEO. He combined formidable technical expertise with a will to win and a sense of fun. In the passenger seat of his Mercury Cougar on the way to San Francisco airport, Reed discovered that his boss was a terrifying driver – weaving back and forth at high speed between lanes on Highway 101 in a playful attempt to show that he could get to the airport before any other car on the road. When Noyce came back from a weekend’s skiing with a broken leg freshly set in plaster, he would challenge the first comer to a wheelchair race down the corridor, laughing uproariously as he spun the wheels of his chair faster and faster, clattering against the wall as the wheelchair veered out of control.
The other role models inside the company were Andy Grove and Les Vadasz. Both of them were as determined to win as Noyce was. But they took life, and work, far more seriously. Grove told his old Fairchild colleagues that he believed their old company had been run far too much like a holiday camp. Vadasz, meanwhile, wanted tidy desks, proper filing systems, accurate lab notes, regular performance reviews.
The attempt to impose these qualities on the company’s engineering staff soon began to lead to friction. In March 1971, three months after the 1103 was introduced in commercial quantities, Vadasz wrote a performance review for John Reed which said as much about his own personality as about the engineer whose performance he was supposed to be rating.
‘One of the clichés one uses in reviewing’, Vadasz began, ‘is to say that so and so is a “capable engineer”. There is not much point, however, in a review to say only that. In fact, the more capable an engineer, the more need there is to explore not only accomplishments but to try to analyse problems, failures and all that is negative about the engineer’s job performance.’
He then offered a paragraph of measured praise, and then six further paragraphs demolishing Reed’s working practices point by point. He complained that the ‘problems the [1103] suffers from could fill a book’. Reed had ‘disengage[d] himself’ from day-to-day problems. He showed a ‘complete lack of initiative in taking (or identifying the need for) action’. It was ‘inexcusable’ that he failed to keep himself familiar with vital technical data. Reed was ‘disorganized’, and left ‘devices and data scattered about’. He always wanted ‘to move on too fast to new projects’.
‘I want to emphasize’, Vadasz concluded, ‘that I respect John’s engineering capability very much. John can solve any circuit problem we will have … My objections above all were all related to John’s working habits. Habits can be changed. I hope that John will be able to use this criticism in a constructive manner.’
Vadasz was wrong. The review made Reed incandescent with rage. He instantly wrote a furious memo for his own personnel file, headed, ‘To Whom It May Concern’, complaining about it. Reed opened his reply by pleading guilty to the charge of needing corrective feedback from above to keep him working on matters that were important. Then he went on the attack.
‘Here is a typewritten, signed off, filed-in-my-records report,’ he wrote, ‘citing specific examples of bad things I have done in my eight and one-half month tenure here, each one of which should have been directly criticized on the day it occurred! … The practice of saving up all these “constructive” criticisms in one package, to be delivered below the belt (in the form of a copy of an already filed report!), after the fact, is an indefensible management policy.’
So angered and disillusioned was Reed by the incident that he immediately cut back the eighty hours a week he had been spending at the plant, and started devoting more time to seeing his family and singing in a local choral group. Within another year he had left Intel for ever. When Andy Grove, hearing of his departure plans, asked him what could be done to make him stay, Reed looked at him uncomprehendingly. ‘This company is like a woman,’ he told Grove bitterly. ‘You’re madly in love with her, but then you find she’s been cheating on you. After that, you just can’t give your hundred per cent any more.’
‘We’d be happy with ninety-five,’ replied Grove.
But it was no good. Reed was determined to leave the company, and the only way to make the best of a bad job was to circulate the Vadasz review and the Reed response around
