Andy Grove, the man who codified the commercial IC industry dynamic as “Only the Paranoid Survive” died yesterday at the age of 79. His instinctive paranoia derived from his tragic experiences while growing up in Hungary, as referenced by Wikipedia in the prolog to “Swimming Across: a Memoir”:
By the time I was twenty, I had lived through a Hungarian Fascist dictatorship, German military occupation, the Nazis’ “Final Solution,” the siege of Budapest by the Soviet Red Army, a period of chaotic democracy in the years immediately after the war, a variety of repressive Communist regimes, and a popular uprising that was put down at gunpoint. . . [where] many young people were killed; countless others were interned. Some two hundred thousand Hungarians escaped to the West. I was one of them.
Grove was responsible for guiding Intel in the 1980s through the amazingly risky yet ultimately wildly successful strategy of abandoning memory chip production as part of a diversified product portfolio to “bet the company” on microprocessors. In the September 1997 issue of Solid State Technology, I wrote an article titled “DRAM fab strategies in Asia” that summarizes why and how US companies like Intel strategically abandoned DRAM production:
In the 1960s, US companies created the IC manufacturing industry and enjoyed virtually unchallenged world dominance through the 1970s. Japanese IC companies, though at first the junior companies in low-margin and foundry partnerships, rose to challenge the more senior US companies in the 1980s. By the latter half of the 1980s, Japan effectively owned the DRAM business and Japan`s outstanding success in IC production can be directly traced to early US manufacturing partnerships. One strategy played out by US companies with portfolios of memory chip designs was outsourcing of DRAM production to Korean companies. In so doing, US companies committed their futures to non-DRAM products such as microprocessors, DSPs, and ASICs.
Few executives have sufficient vision while leading a work-force with sufficient discipline to be able to re-invent a company in such a way. The capital equipment investments needed to create a leading-edge IC fab have always been daunting, and as Intel employee #3 who had led engineering Grove was able to see a way to leverage strategic R&D to ensure that leading-edge IC product functionalities would pull in sufficient demand to keep the fabs full. Not only did the fabs stay full, but the x86 microprocessor profit margins allowed Intel to grow to annual sales of $25 billion by the time he was replaced as CEO by Craig Barrett in 1998.
The San Jose Mercury News and EETimes have published wonderful additional remembrances of his life. Andy Grove blessed our industry by being a living example of engineering excellence and legit leadership.