The Microchip That Made Silicon Valley—and All Modern Technology—Possible

Silicon, which is crucial to computers, is also in grains of sand on beaches. VOLODYMYR KRASYUK/ISTOCK

All modern technology comes down to one tiny piece of oxidized silicon cemented atop a circuit. Without the pioneers who created it, future founding fathers such as Bill Gates and Mark Zuckerberg would have had nothing upon which to build their empires. Newsweek explores the phenomenon of the microchip in this article excerpted from a new Special Edition, The Founding Fathers of Silicon Valley, Exploring 60 Years of Innovation, by Issue Editor Alicia Kort.

As the inventions and innovations springing out of Silicon Valley become more ingrained in our lives, San Francisco has become the most expensive city in which to start a business in America, surpassing both New York City and Los Angeles in office rental prices. According to Forbes, technology services and electronics are the second and fourth most profitable industries in the U.S., respectively, and tech start-up culture has become familiar enough to be lampooned in the media and on HBO. This was, obviously, not always the case.

In the 1930s, the Bay Area (along with the rest of America) was devoid of tech companies. The main attraction along the coast of what was then called "The Valley of Heart's Delight" was the miles of fruit trees that lined the roads, providing work for many young immigrant families.

When the Depression hit, Heart's Delight was devastated. The fruit industry struggled more than most until the overall economy saw an uptick during World War II. After years of downturn, Heart's Delight suddenly became a great place to put weapons technology companies—in part thanks to the proximity of professors at universities like Stanford. A group of technology-based companies moved west and settled in the fertile Valley, ready to grow a new industry from the ground up.

Back east in postwar New York and New Jersey at Bell Labs—founded by Alexander Graham Bell—a trio was working on an invention that would be the first major step in creating machines that were both more accessible and more powerful than the ones used by the Allies during World War II. William Shockley, John Bardeen and Walter Brattain were searching for an alternative to vacuum tubes, which were constantly overheating. While Shockley was out of the office, Bardeen and Brattain solved the problem when they discovered geranium could be used as a medium for conducting electrons, and that they could turn the flow of electricity on and off by using a circuit. They called their creation the transistor. Bell Labs filed a patent immediately, but Shockley was not included on it.

A temperamental, headstrong researcher, Shockley was furious. He shunned his two teammates and decided to work alone on a transistor that could be sold commercially. He unveiled his creation, dubbed the junction transistor—which had a more robust "sandwich" structure with positive and negative electrons—in 1951. Finally receiving the attention he desired, Shockley left Bell Labs in 1956 to move to Mountain View, California, to start his own endeavor: Shockley Semiconductor Laboratory.

The location was chosen mainly out of convenience (Shockley's mother was ill and lived in the area), but it would have a major impact on the region and the industry. "It was the 13th of February 1956 when Beckman and Shockley signed the formal agreement to do this, and the announcement was made the next day, February 14," said David Laws, curator at the Computer History Museum, about the date Silicon Valley was founded. "That was really the defining moment, when it was decreed the silicon device would be made in Silicon Valley."

After it was official, Shockley hired researchers, including Robert Noyce, Jean Hoerni and Gordon Moore, to investigate if silicon could be used as a material in semiconductors. Not long into their new jobs at Shockley Semiconductor, the eight researchers noticed that, after Shockley won his Nobel Prize, their boss had become erratic and paranoid. They couldn't stand working with him, so much so that they went to Arnold Beckman and declared they would only stay if Shockley was pushed out of the company. Beckman sided with his partner, and the "Traitorous Eight" made good on their word and sought out a new opportunity. Sherman Fairchild, owner of Fairchild Aircraft and Fairchild Camera, was the one who presented it. He told the group they should start their own company, and he would front the money. Thus, Fairchild Semiconductors was born. It was a landmark hire.

In 1957, despite the fact that transistors had replaced vacuum tubes, solving a problem which had been plaguing engineers for years, there was a larger obstacle ahead. Transistors had to be carefully hand wired and soldered together, and if any wire was out of place, the transistor would not work. Each transistor represented a "yes" or "no" switch: In order to solve a complex problem or program a task, there needed to be more "yeses" and "nos," so more and more transistors were used. In order to solve more complex problems, contrary to the slimming and shrinking of devices we see so often today, computers were getting larger. But even the biggest machines were only so big. The idea of the personal computer had already been conceived, but it agonizingly could not be executed due to this "tyranny of numbers."

The entire world was racing to solve the problem, and two teams of engineers reached the finish within months of each other: Fairchild Semiconductor, led by Robert Noyce, and Texas Instruments, led by Jack Kilby.

Shortly after starting his job at TI, Kilby was relatively alone in the office, the rest of the staff taking advantage of summer vacation. It seemed silly to Kilby to make separate transistors and then attempt to wire them together. He realized they would be more powerful and stable on one piece of silicon, but he still had to figure out how to incorporate the transistor into the chip.

A not-quite-as detailed-as-Google Earth view of Silicon Valley. The term “Silicon Valley” was first published in print by Don Hoefler in Electronic News on January 11, 1971. AERIAL ARCHIVES/ALAMY

Meanwhile, Fairchild's Jean Hoerni had this exact same breakthrough. "Jean Hoerni invented a way of making integrated circuits, called the planar process, which absolutely revolutionized the building of semiconductors," says Laws. "It turned it from a handcrafted, one-at-a-time operation into a mass production operation and continues to be the essence of the way chips are made today, 60 years later."

The planar process used a thin layer of oxidized silicon on top of the circuit to protect the transistor. Wires could then be put in place like icing on top of a cake to interconnect them, instead of painstakingly soldered one by one.

Months later, Noyce and Kilby made the discoveries that would complete the integrated circuit, but Texas Instruments was much quicker to submit the idea to the Patent Office. Of course, Fairchild fought to get credit. Noyce was ultimately awarded the patent, but the patent victory was more symbolic than monetary in nature. Both companies were seeing unheard of profits for their computer chips. Kilby continued to work at Texas Instruments for decades more, while Noyce went on to found Intel and create another landmark technology, the microprocessor.

Though Kilby and Noyce's original innovations have grown from tens of transistors to billions of them within one chip, little has changed in the fundamental concept of the planar manufacturing process. These tiny chips power your smartphone, computer and even your kitchen appliances. Without the pioneers who created them, future founding fathers such as Bill Gates and Mark Zuckerberg would have had nothing upon which to build their empires.

This article was excerpted from Newsweek's Special Edition, The Founding Fathers of Silicon Valley, Exploring 60 Years of Innovation, by Issue Editor Alicia Kort. For more about the road to the digital age, pick up a copy today.

FROM LEFT: Matt Carr/Getty Images; Kyodo/AP Images; AP Images; Michael N. Todaro/Getty Images; Taylor Hill/Getty Images; Jon Furniss/Getty Images; Shutterstock; Digital Imaging by Eric Heintz