Shockley Lab Origins of the "Traitorous Eight"
Before birthing the legendary Fairchild Semiconductor, the company‘s fabled founders – known as the "traitorous eight" – worked at Shockley Semiconductor Laboratory. Founded in 1955 by Nobel laureate William Shockley, Shockley Lab was established in Mountain View, California to advance transistor technology following Shockley‘s pivotal contributions to inventing the transistor itself. However, Shockley‘s abrasive management style led to rising tensions with key team members like Gordon Moore, Robert Noyce, Eugene Kleiner and others. Disgruntled at being passed over for management roles and frustrated with Shockley‘s top-down leadership, the eight scientists decided to resign en masse in 1957. This "palace revolt" was the genesis of Fairchild Semiconductor, though Shockley branded the defectors as "traitorous" [1].
Founding in 1957 as Semiconductor Pioneer
With backing from businessman Arthur Rock and Fairchild Camera and Instrument‘s Sherman Fairchild, the "traitorous eight" founded Fairchild Semiconductor on October 1st, 1957 in Palo Alto, California. Victor Grinich, Jean Hoerni, Julius Blank, Sheldon Roberts, and Jay Last joined Rock and Fairchild as incorporators [1]. Hoerni and Noyce had worked together previously at Philco corporation in the mid-1950s, bringing valuable expertise to Fairchild.
| Year Founded | 1957 |
| Founders | Arthur Rock, Sherman Fairchild and "Traitorous Eight" defectors from Shockley Lab |
| Initial Headquarters | Palo Alto, California |
As Leslie Berlin writes in her acclaimed history "Troublemakers", Fairchild Semiconductor "established the template for Silicon Valley" [1]. Prioritizing innovation and spin-off entrepreneurship over rigid hierarchy, Fairchild‘s culture embodied the valley‘s disruptive ethos decades before startups were fashionable.
Planar Process Powers Innovation Engine
Fairchild very quickly established itself at the vanguard of advanced semiconductor manufacturing techniques. In 1959, physicist Jean Hoerni created the revolutionary planar process which enabled transistors to be embedded in protective silicon dioxide layers, overcoming earlier challenges with harnessing silicon as a substrate. This pioneering manufacturing breakthrough meant components could be fabricated side-by-side on silicon wafers, enabling the production of integrated circuits [2].
| 1959 | Jean Hoerni invents the planar process technique |
| 1959 | Annual revenues surpass $1.3 million |
| 1961 | Fairchild sales reach $27 million annually |
Hoerni‘s planar process dovetailed perfectly with physicist Robert Noyce‘s invention of the revolutionary integrated circuit concept in 1959. Noyce realized that if transistors and their wiring could be fabricated together on silicon wafers, complete circuits could be miniaturized onto single chips [3]. Noyce‘s integrated circuit insight built upon Hoerni‘s technique for embedding planar transistors in silicon. By resolving previous issues with yield and cost, Fairchild now had a groundbreaking patent-ready manufacturing process and end product.
Meteoric Growth as Industry Leader
Combining the pioneering planar process with Noyce‘s integrated circuit concept proved the magic formula to catapult Fairchild to meteoric growth as a market leader through the 1960s. In just two years from 1959 to 1961, annual revenues exploded from $1.3 million to over $27 million [4]. By 1966, this figure exceeded $130 million as Fairchild cemented its stature to become America‘s second largest semiconductor company behind only Texas Instruments [1].
| 1966 | Annual revenues surpass $130 million, second only to Texas Instruments |
| 1968 | Noyce and Moore depart to found Intel |
This remarkable growth was fueled by Fairchild‘s transistors and integrated circuits proving enormously successful across electronics of the 1960s, powering products from mainframes to Apollo space modules [1]. IBM became an early adopter of Fairchild components for its computers. Meanwhile Noyce‘s friend and future Intel co-founder Gordon Moore devised empirical rules for the exponential increases in complexity in integrated circuits – dubbed Moore‘s Law in 1965.
Spin-offs Spawn New Tech Giants
Fairchild‘s culture fostering ambition and innovation led to major spin-offs through employee entrepreneurship – the so called "Fairchildren" [1]. Robert Noyce and Gordon Moore departed in 1968 to found NM Electronics, which later became Intel Corporation. Other influential spin-offs included LSI Logic by Wilf Corrigan and Advanced Micro Devices by Jerry Sanders. These highly successful companies commercialized their own advances building upon Fairchild‘s pioneering efforts in semiconductors.
Meanwhile back at Fairchild, physicist C. Lester Hogan became CEO in 1969. Hogan led the development of advanced products like the first charge-coupled device. This 1962 invention by Willard Boyle and George Smith powered imaging chips enabling digital photography. 1976 saw Fairchild diversify into the burgeoning videogame industry with the pioneering Channel F console system featuring early programmable graphics.
Changing Fortunes and Ownership in Maturing Industry
After achieving stunning growth through the 1960s, Fairchild Semiconductor began to face challenges on multiple fronts by the 1970s. The pioneering company that had trailblazed the path for Silicon Valley now had to compete with upstart rivals across a maturing industry. Chief among these was Intel, the successful startup founded by ex-Fairchild duo Gordon Moore and Robert Noyce. Japanese semiconductor firms like Sony also increasingly contested the consumer electronics markets Fairchild supplied.
In 1979, with debts mounting amidst growing competition, Fairchild Camera and Instrument sold off its namesake semiconductor division to Schlumberger Limited for $425 million. The deal marked the end of Fairchild‘s founding chapter as industry pioneers, though it proved just one turn in an unfolding journey crisscrossing many ownership changes to come.
| 1979 | Schlumberger Limited acquires Fairchild Semiconductor for $425 million |
| 1987 | National Semiconductor purchases Fairchild $200 million |
Under Schlumberger, Fairchild Semiconductor underwent rounds of restructuring before being spun back out as an independent unit. In 1987, with mounting losses a major challenge, Fairchild was sold again – this time to National Semiconductor for $200 million [5]. But National struggled to make Fairchild profitable, eventually deciding to spin the business out by selling 80% stake to Sterling Group venture capitalists in 1997. This gave Fairchild Semiconductor its independence once more [6].
Bouncing Back Through Acquisitions
Now under CEO Kirk Pond, Fairchild regained traction through the 2000s via acquisitions and renewed product development. A 1997 purchase of Samsung‘s power IC division provided expansion into higher performance devices. Meanwhile the 1999 acquisition of Raytheon‘s RF Components business bolstered Fairchild‘s portfolio offering to the booming wireless infrastructure and mobile handset markets [6].
Coinciding with the rise of mobile hardware and green technology targeting improved energy efficiency, Fairchild pivoted towards innovations like its proprietary PowerTrench MOSFET components. Higher performance power management and motor driver ICs drove record revenues past $1 billion in 2010. Tablets, smartphones and fuel efficient vehicles provided demand tailwinds.
| 1999 | Acquires Raytheon RF Components for $450 million |
| 2010 | Annual revenues surpass $1 billion |
However industry consolidation amongst maturing semiconductor players loomed large. Acquisition overtures had been made to Fairchild leadership repeatedly over the prior decade. With slowing end markets like mobile and difficulties keeping up with leading edge fabrication, Fairchild finally opted towards being merged.
End of the Line: Absorption into ON Semiconductor
In September 2016, ON Semiconductor successfully acquired Fairchild Semiconductor for $2.4 billion in cash. The deal combined two major pure-play semiconductor suppliers to create an entity with combined revenues over $5 billion annually [7]. However it also marked the final chapter in Fairchild‘s history as longtime industry pioneers across 6 decades. With Fairchild‘s stock delisted and locations absorbed into ON Semiconductor, the iconic company name passed into history.
| 2016 | ON Semiconductor acquires Fairchild Semiconductor for $2.4 billion |
But while Fairchild Semiconductor no longer operates as an independent player, its legacy looms large over Silicon Valley. Critical innovations like the planar process, integrated circuit, and charge-coupled device redefined what was possible in electronics over the latter 20th century. And famous spin-offs like Intel remind us Fairchild‘s entrepreneurial DNA remains at the heart of the tech industry today.
The Lasting Legacy of a Silicon Valley Pioneer
Across six eventful decades encompassing breathtaking growth and changeable fortunes amidst rapid industry evolution, Fairchild Semiconductor‘s impact runs deep and wide.
On the technology side, Fairchild‘s inventions propelled nothing less than the computer hardware revolution. Their manufacturing expertise brought vital concepts like Moore‘s Law to commercial reality decade after decade. Components flowing from their fabrication lines found homes powering everything from IBM mainframes to Apollo rockets, personal computers to iPhones.
Meanwhile from a business perspective, Fairchild‘s spin-off entrepreneurial culture seeded a whole generation of industry giants. Trailblazing alumni infused Silicon Valley with technical know-how and appetite for risk-taking. The semiconductor business models Fairchild defined underpin trillion dollar behemoths today like Apple, Nvidia and Qualcomm.
And for the history books, Fairchild‘s story remains central to grasping how our digital age emerged. Their meteoric rise and rollercoaster fortunes intertwined deeply with growth cycles across electronics, computing, and an iconic regional cluster dubbed Silicon Valley. As long as disruptive innovation remains prized, the pioneering legend of Fairchild Semiconductor will persist bright and clear.
