Bell Labs

Historical Interlude: From the Mainframe to the Minicomputer Part 1, Transistors and Integrated Circuits

So now its time to pause again in our examination of video game history to catch up on the technological advances that would culminate in the emergence of an interactive entertainment industry.  As previously discussed, the release and subsequent spread of Spacewar! in 1962 represented the first widespread interest in computer gaming, yet no commercial products would appear before 1971.  In the meantime, computer games continued to be written throughout the 1960s (which will be discussed in a subsequent post), but none of them gained the same wide exposure or popularity as Spacewar!.  Numerous roadblocks prevented the spread of these early computer games ranging from the difficulty of porting programs between systems to the lack of reliable wide area distribution networks, but the primary inhibitor remained cost, as even a relatively cheap $120,000 PDP-1 remained an investment out of the reach of most organizations — let alone the general public — and many computers still cost ten times that amount.

The key to transforming the video game into a commercial product therefore lay in significantly reducing the cost of the hardware involved.  The primary expense in building a computer remained the switching units that defined their internal logic, which in the late 1950s were still generally the bulky, power-hungry, temperamental vacuum tubes.  In 1947, John Bardeen and Walter Brattain at Bell Labs demonstrated the solution to the vacuum tube problem in the form of the semiconducting transistor, but as with any new technology there were numerous production and cost issues that had to be overcome before it could completely displace the vacuum tube.  By the early 1960s, the transistor was finally well established in the computer industry, but while it drove down the cost and size of computers like DEC’s PDP-1, a consumer product remained out of reach.  Finally, in late 1958 and early 1959 engineers working independently at two of the most important semiconductor manufacturers in the world discovered how to integrate all of the components of a circuit on one small plate, commonly called a “chip,” paving the way for cost and size reductions that would allow the creation of the first minicomputers, which remained out of reach for the individual consumer, but could at least be deployed in a public entertainment setting like an arcade.

Note:  Once again, this is a “historical interlude” post that will provide a summary of events drawn from a few secondary sources rather than the in-depth historiographic analysis of my purely game-related posts.  The majority of the information in this post is drawn from Forbes Greatest Technology Stories: Inspiring Tales of the Entrepreneurs and Inventors Who Revolutionized Modern Business by Jeffrey Young, The Man Behind the Microchip: Robert Noyce and the Invention of Silicon Valley by Leslie Berlin, The Intel Trinity: How Robert Noyce, Gordon Moore, and Andy Grove Built the World’s Most Important Company by Michael Malone, an article from the July 1982 issue of Texas Monthly called “The Texas Edison” by T.R. Reid, and The Silicon Engine, an online exhibit maintained by the Computer History Museum.

The Transistor Enters Mass Production

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Gordon Teal (l), whose crystal-growing techniques were crucial to mass producing the transistor

As previously discussed, on December 23, 1947, William Shockley, John Bardeen, and Walter Brattain demonstrated the transistor for the first time in front of a group of managers at Bell Labs, which is widely considered the official birthday of the device.  This transistor consisted of a lump of germanium with three wires soldered to its surface in order to introduce the electrons.  While this point-contact transistor produced the desired results, however, it was difficult to manufacture, with yield rates of only fifty percent.  Determined to create a better device — in part due to anger that Bardeen and Brattain received all the credit for the invention — William Shockley explored alternative avenues to create a less fragile transistor.

In 1940, Bell Labs researchers Russell Ohl and Jack Scaff had discovered while working on semiconductor applications for radar that semiconducting crystals could have either a positive or a negative polarity, which were classified as p-type and n-type crystals respectively.  Shockley believed that by creating a “sandwich” with a small amount of p-type material placed between n-type material on either end, he could create what he termed a junction transistor that would amplify or block a current when a charge of the appropriate polarity was applied to the p-type material in the middle.  Placing the required impurities in just the right spots in the germanium proved challenging, but by 1949, Shockley was able to demonstrate a working p-n junction transistor.  While the junction transistor was theoretically well suited for mass production, however, in reality the stringent purity and uniformity requirements of the semiconducting crystals presented great challenges.  Gordon Teal, a chemist with a Ph.D. from Brown who joined Bell Labs in 1930 and worked on radar during World War II, believed that large crystals doped with impurities at precise points would be necessary to reliably produce a working junction transistor, but he apparently garnered little support for his theories from Shockley and other managers at Bell Labs.  He finally took it upon himself to develop a suitable process for growing crystals with the help of engineer John Little and technician Ernest Buehler, which they successfully demonstrated in 1951.  That same year, another Bell Labs researcher named William Pfann developed a technique called zone refining that allowed for the creation of ultra-pure crystals with minuscule amounts of impurities, which lowered the manufacturing cost of the junction transistor significantly.  Together, the advances by Teal and Pfann provided Bell Labs with a viable fabrication process for transistors.

Part of the reason Teal could not generate much excitement about his manufacturing techniques at Bell Labs is that AT&T remained unsure about entering the transistor business.  Despite recent advances, executives remained doubtful that the transistor would ultimately replace the large and well-established vacuum tube industry.  Worse, the company was currently under investigation by the U.S Department of Justice for anti-trust violations and was therefore hesitant to enter and attempt to dominate a new field of technology.  Therefore, in 1952 the company decided to offer a royalty-free license to any company willing to research integrating the transistor into hearing aids, one of the original passions of company founder Alexander Graham Bell, and held a series of technical seminars introducing interested parties to the device.  Several large electronics companies signed up, including Raytheon, Zenith, and RCA.  They were joined by a relatively small company named Texas Instruments (TI).

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From Left to Right, John Erik Jonsson, Henry Bates Peacock, Eugene McDermott, and Cecil Green, the men who transformed Geophysical Service, Inc. into Texas Intruments

In 1924, two physicists named Clarence Karcher and Eugene McDermott established the Geophysical Research Corporation (GRC) in Tulsa, Oklahoma, as a subsidiary of Amerada Petroleum.  The duo had been developing a reflection-seismograph process to map faults and domes beneath the earth when they realized that the same process was ideal for discovering oil deposits.  By 1930, GRC had become the leading geophysical exploration company active along the Gulf Coast, but the founders disliked working for Amerada, so they established a new laboratory in Newark, New Jersey, and with investment from geologist Everette DeGolyer formed a new independent company called Geophysical Service, Inc. (GSI).  In 1934, the company moved the laboratory to Dallas to be closer to the heart of the oil trade.

The early 1930s were not a particularly auspicious time to start a new business with the Great Depression in full swing, but GSI managed to grow by aggressively expanding its oil exploration business into international markets such as Mexico, South America, and the Middle East.  Success abroad did not fully compensate for difficulties in the US, however, so in December 1938, the company reorganized in order to exploit the untapped oil fields in the American Southwest.  A new Geophysical Service, Inc. — renamed the Coronado Corporation early the next year — was established with Karcher at the helm as an oil production business, while the original GSI, now headed solely by McDermott, became a subsidiary of Coronado and continued in the exploration business.  The company failed to flourish, however, so in 1941 Karcher negotiated a $5 million sale of Coronado to Stanolind Oil & Gas.  Not particularly interested in the exploration business, Stanolind offered the employees of GSI the opportunity to buy back the company for $300,000.  McDermott, R&D head J. Erik Jonsson, field exploration head Cecil Green, and crew chief H. Bates Peaock managed to scrape together the necessary funding and purchased GSI on December 6, 1941.  The very next day, the Japanese bombed Pearl Harbor, dragging the United States into World War II.

With so much of its business tied up in international oil exploration work that would have to be abandoned during the coming global conflict, GSI would be unable to survive by concentrating solely on its primary business and now needed to find additional sources of income.  The solution to this problem came from Jonsson, a former aluminium sales engineer who had been in charge of R&D at GSI since the company’s inception in 1930, who realized that the same technology used for locating oil could also be used to locate ships and airplanes.  A fortuitous connection between McDermott and Dr. Dana Mitchell, who was part of a group working on electronic countermeasure technology, led to a contract to manufacture a device called the magnetic anomaly detection (MAD) system.  Building on this work, GSI emerged as a major supplier of military electronics by the end of the war.

During the war, Jonsson became impressed with an electrical engineer and Navy lieutenant from North Dakota working as a procurement officer for the Navy’s Bureau of Aeronautics named Patrick Haggerty.  In 1946, GSI hired Haggerty to run its new Laboratory and Manufacturing Division, which the company established to expand its wartime electronics work in both the military and private sectors.  Haggerty was determined to transform GSI into a major player in the field and convinced management to invest in a large new manufacturing plant that would require the company to tap nearly its entire $350,000 line of credit with the Republic National Bank.  By 1950, this investment had turned into annual sales of nearly $10 million a year.  With manufacturing now a far more important part of the business than oil exploration, company executives realized the name GSI no longer fit the company.  They decided to change the name to General Instruments, which conjured up visions of the great electronics concerns of the East like General Electric.  Unfortunately, there was already a defense contractor with that name, so the Pentagon asked them to pick something else.  They chose Texas Instruments.

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Patrick J. Haggerty, the man who brought TI into the transistor business

When Patrick Haggerty learned AT&T was offering licenses for transistor technology, he knew immediately that TI had to be involved.  AT&T, however, disagreed.  In 1952, TI had realized a profit of $900,000 on sales of just $20 million and did not appear capable of making the necessary investment to harness the full potential of the transistor.  It took a year for TI management to finally convince AT&T to grant the firm the $25,000 license, after which Haggerty made another large financial gamble, investing over $4 million in manufacturing plants, development, new hires, and other startup costs.  Before the end of 1952, TI had its first order for 100 germanium transistors from the Gruen Watch Company, and production formally began.

Haggerty had muscled TI into an important new segment of the electronics industry, but in the end it was AT&T that was proven correct:  TI really was too small to make much of an impact in the germanium transistor market.  Haggerty therefore turned to new technology to keep his company relevant in the field.  While germanium served as a perfectly fine semiconducting material at temperatures below 100 degrees Fahrenheit, the low melting point of the element inhibited its semiconducting properties at high temperatures, rendering it unsuitable for defense projects like guided missiles.  Silicon offered both better semiconducting capability and a higher temperature tolerance, but despite the best efforts of scientists at Bell Labs and elsewhere, the element had proven impossible to dope with the necessary impurities.  This did not dissuade Haggerty, who placed an ad in the New York Times for a new chief researcher who could bring TI into silicon transistors.  That ad was answered by none other than brilliant Bell Labs chemist Gordon Teal.

Feeling unappreciated after facing such resistance to his research at Bell Labs, Teal was ready to move on, but despite answering the TI ad, he was not certain the Texas company was the right fit.  Solving the problems with silicon would require a great deal of time and money, and TI remained a relatively small concern.  Haggerty reassured him, however, by revealing that TI was preparing to merge with Intercontinental Rubber, a cash-rich firm listed on the New York Stock Exchange with a faltering tire and rubber business.  This merger, completed in October 1953, made TI a public company and guaranteed that Teal would have the funding he needed.  Haggerty promised Teal anything and anyone he needed with only one stipulation: after one year, Teal would need to have a product TI could bring to market.  Teal accepted the challenge.

1954 proved to be a trying year for TI.  While the transistor business failed to gain traction against larger competitors, the defense contracts the company depended upon as its primary source of revenue began to dry up with the end of the Korean War and a subsequent cut in military spending.  Revenues that had risen to $27 million in 1953 declined to $24 million, profits fell slightly from $1.27 million to $1.2 million, and the stock began trading in single digits.  That same year, however, Teal succeeded in developing a complicated high-temperature doping and zone refining process that yielded a viable silicon transistor.  At a conference on airborne aeronautics held in Dayton, Ohio, that spring, Teal not only proudly announced to the assembled that TI had a working silicon transistor in production, he also provided a dramatic demonstration.  A record player was produced, specially modified so that a transistor could be snapped in and out to complete a circuit.  First, Teal snapped in a germanium transistor and then dropped it into a beaker of hot oil, which destroyed the transistor and stopped the player.  Then, he performed the same action with a silicon transistor.  The music played on.  TI quickly found itself swamped with orders.

New Players

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The “Traitorous Eight,” who left Shockley Semiconductor to establish Fairchild Semiconductor.

From left: Gordon Moore, C. Sheldon Roberts, Eugene Kleiner, Robert Noyce, Victor Grinich, Julius Blank, Jean Hoerni, and Jay Last

In 1954 Bell Labs chemist Calvin Fuller developed a new technique called the diffusion process in which silicon could be doped at high temperatures using gasses containing the desired impurities.  By the next March, Bell Labs chemist Morris Tanenbaum had succeeded in harnessing the diffusion process to create semiconducting material so thin that a silicon wafer could be created in which each layer of the n-p-n sandwich was only a millimeter thick.  The resulting diffusion-base transistor operated at much higher frequencies than previous junction transistors and therefore performed much faster.  With Gordon Teal’s crystal-growing expertise and Patrick Haggerty’s salesmanship, TI kept pace with these advancements and enjoyed a virtual monopoly on the emerging field of silicon transistors during the next few years, with company revenues soaring to $45.7 million in 1956.  The transistor business, however, remained a relatively small part of the overall electronics industry.  Between 1954 and 1956, 17 million germanium transistors and 11 million silicon transistors were sold in the United States.  During the same period, 1.3 billion vacuum tubes were sold.

Practically speaking, the vacuum tube companies appeared to hold a distinct advantage, as they could theoretically use the enormous resources at their disposal from their vacuum tube sales to support R&D in transistors and gradually transition to the new technology.  In reality, however, while most of the major tube companies established small transistor operations, they were so accustomed to the relatively static technologies and processes associated with the tube industry that they were unable to cope with the volatile pricing and ever-changing manufacturing techniques that defined the transistor industry.  The Philco Corporation is a poster child for these difficulties.  Established in Philadelphia in 1892 as the Helios Electric Company to produce lamps, Philco became a major player in the emerging field of consumer radios in the mid-1920s and by the end of World War II was one of the largest producers of vacuum tubes in the United States.  The company seriously pursued transistor technology, creating in 1953 the high-speed surface-barrier transistor discussed in a previous post that powered the TX-0.  In 1956, Philco improved the surface-barrier transistor by employing the diffusion process, but the company soon grew leery of attempting to keep up with new transistor technologies.  The original surface-barrier transistor had been fast, but expensive, and the diffusion-based model cost even more, retailing for around $100.  As technology continued to progress, however, the price fell to $50 within six months, and then to $19 a year after that.  By the next year, lots of 1,000 Philco transistors could be had for a mere $6.75.  Spooked, the company ultimately decided to remain focused on vacuum tubes.  By 1960, Philco had entered bankruptcy, and Ford subsequently purchased the firm in 1961.

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The Shockley Semiconductor Laboratory in the Heart of the region that would become Silicon Valley

While the old guard in the electronics industry ultimately exerted little influence on the transistor business, TI soon faced competition from more formidable opponents.  In 1950, William Shockley paid a visit to Georges Doriot, the pioneering venture capitalist who later funded the Digital Equipment Corporation.  Surprisingly, their discussion did not focus on the transistor, but rather on another invention Shockley patented in 1948, a “Radiant Energy Control System,” essentially a feedback system using a visual sensor.  Shockley had worked on improving bomb sights during World War II and saw this system as the next step, potentially allowing a self-guided bomb to compare photographs of targets with visual data from the sensor for increased accuracy.  The same technology could also be used for facial recognition, or for automated sorting of components in manufacturing.  Since the publication of mathematician Norbert Wiener’s groundbreaking book, Cybernetics, in 1948, the Cambridge academic community had been excited by the prospect of using artificial systems to replace human labor for more mundane tasks.  Indeed, in 1952 this concept would gain the name “automation,” a term first coined by Delmar Harder at Ford and popularized by Harvard Business School Professor John Diebold in his book Automation: The Advent of the Automatic Factory.  When Doriot learned of Shockley’s control system, he urged the eminent physicist to waste no time in starting his own company.

By 1951, Shockley had refined his “Radiant Energy Control System” into an optoelectronic eye he felt could form the core of an automated robot that could replace humans on the manufacturing line.  After negotiating an exemption with Bell Labs allowing him to maintain the rights to any patents he filed related to automation for the period of one year, Shockley filed a patent for an “Electrooptical Control System” and wrote a memo to Bell Labs president Mervin Kelly urging the organization to build an “automatic trainable robot.”  When Kelly refused to consider such a project, Shockley, already stripped of most of his responsibilities regarding transistor development due to incessant conflicts with his team, took a leave of absence from Bell Labs in late 1952.  After a year as a visiting professor at CalTech, Shockley became director of the Pentagon’s Weapons Systems Evaluation Group and spent the next year or so studying methods for the U.S. to fight a nuclear war while periodically turning down offers to teach at prestigious universities or establish his own semiconductor operation.

In February 1955, Shockley met renowned chemist Arnold Beckman at a gala in Los Angeles honoring Shockley and amplifier inventor Lee DeForest.  The two bonded over their shared interest in automation and kept in touch over the following months.  Finally, in June 1955, Shockley decided he needed to radically change his life, so he resigned from both Bell Labs and his Pentagon job, divorced his wife, and began to seriously consider offers to start his own company.  The next month, he contacted Beckman to propose forming a company together to bring the new diffusion transistor to market and develop methods to automate the production of transistors.  After a period of negotiation, the Shockley Semiconductor Laboratory was established in September 1955 as a subsidiary of Beckman Instruments.  Even though Beckman was headquartered in Southern California, Shockley convinced his new partner to locate Shockley Semiconductor further north in Palo Alto, California, so he could once again remain close to his mother.

Unable to recruit personnel from Bell Labs, where his reputation as a horrible boss proceeded him, Shockley scoured technical conferences, college physics departments, and research laboratories for bright young scientists and engineers.  One of his first hires also proved to be his most important, a young physicist named Bob Noyce.  Born in 1927 in Burlington, Iowa, Robert Norton Noyce was the son of a Congregationalist minister who moved his family all over the state of Iowa as he migrated from one congregation to the next.  This itinerant life, made even more difficult by the Depression, finally ended in 1940 when Ralph Noyce took a job in the college town of Grinnell, Iowa.  Bob Noyce thrived in Grinnell, where his natural charisma and sense of adventure soon made him the leader among the neighborhood children.  A brilliant student despite a penchant for mischief and goofing off, Noyce took a college physics course at Grinnell College during his senior year of high school and graduated class valedictorian.  The Miami University Department of Physics offered to give him a job as a lab assistant if he attended the school — an honor usually reserved for graduate students — but worrying he could just be another face in the crowd at such a large institution, Noyce chose to study at Grinnell College instead.

At Grinnell, Noyce nearly lost his way at the end of his junior year.  Eager to maintain his social standing among older students returning from World War II, Noyce agreed to “procure” a pig to roast at a Hawaiian Luau dorm party.  Soon after, he learned his girlfriend was pregnant and would need an abortion.  Depressed, Noyce got drunk and with the help of a friend stole a pig from a local farmer’s field.  Feeling remorseful, they returned the next day to apologize to the farmer and pay for the pig only to learn that he was the mayor of Grinnell and did not take the prank lightly.  Noyce was almost expelled as a result, but he was saved by his physics professor, Grant Gale, who saw Noyce as a once-in-a-generation talent that should not be squandered over an ill-advised prank.  The university relented and merely suspended him for a semester.

When Noyce returned to Grinnell after working for a life insurance company in New York during his forced exile, he was introduced to the technology that would change his life.  His mentor Gale was an old friend of transistor co-inventor John Bardeen, with whom he had attended the University of Wisconsin, while the head of research at Bell Labs, Oliver Buckley, was a Grinnell graduate.  Gale therefore learned of the transistor’s invention early and was able to secure a wide array of documentation on the new device from Bell.  When Noyce saw his professor enraptured by these documents, he dove right in himself and soon resolved to learn everything he could about transistors.  After graduating from Grinnell with degrees in mathematics and physics, Noyce matriculated to the physics department at MIT, where he planned to focus his studies on solid-state physics.  As transistors were so new, most of Noyce’s classwork revolved around vacuum tubes, but his dissertation, completed in mid 1953, dealt with matters related to transistor development.  Upon earning his doctorate in physics, Noyce took a job at Philco, where in 1950 R&D executive Bill Bradley had established the 25-man research group that developed the surface-barrier transistor.  Noyce rose through the ranks quickly at Philco, but he soon became disillusioned with the layers of bureaucracy and paperwork inherent in working for a large defense contractor, especially after the company was forced to significantly curtail R&D activities due to losses.  Just as Noyce was looking for a way out, Shockley called in January 1956 after reading a paper Noyce had presented on surface-barrier transistors several months earlier at a conference.  In March, Noyce headed west to join Shockley Semiconductor.

Before long, Shockley had succeeded in recruiting a team of about twenty with expertise in a variety of fields related to transistor creation. These individuals included a Ph.D. candidate in the solid state physics program at MIT named Jay Last, a chemist at the Johns Hopkins Applied Physics Lab named Gordon Moore, a mechanical engineer at Western Electric named Julius Blank, Viennese World War II refugee and expert tool builder Eugene Kleiner, metallurgist Sheldon Roberts, Swiss theoretical physicist Jean Hoerni, and Stanford Research Institute physicist Vic Grinich.  Shockley hoped these bright young scientists would secure his company’s dominance in the semiconductor industry.

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Sherman Fairchild, the inventor and businessman who financed Fairchild Semiconductor

On November 1, 1956, William Shockley learned that he had been awarded the Nobel Prize for Physics — shared with Walter Brattain and John Bardeen — for the invention of the transistor.  Theoretically at the height of his fame and powers, Shockley soon found his entire operation falling apart.  Always a difficult man to work for, his autocratic tendencies grew even worse now that he was a Nobel laureate in charge of his own company.  He micromanaged employees, even in areas outside of his expertise, and viciously attacked them when their work was not up to his standards.  Feeling threatened by Jean Hoerni and his pair of doctorates, he once exiled the physicist to an apartment to work alone, though he later relented.  He discouraged his employees from pursuing their own projects and insisted on adding his name to any paper they presented, whether he had any involvement in the subject or not.  Once, when a secretary cut her hand on a piece of metal protruding from a door, he insisted it must have been an act of sabotage and threatened to hire a private investigator and subject the staff to lie detector tests.  He was finally dissuaded by Roberts, who convinced him with the aid of a microscope that the piece of metal was merely a tack that had lost its plastic head.

The final straw was Shockley’s insistence on pulling staff and resources from improving upon the diffusion-base silicon transistor to work on a new four-layer diode project he believed could act as both a transistor and a resistor and was theoretically faster and cheaper than a germanium transistor.   In reality, this device proved impossible to create, and R&D costs began to spiral out of control with no sellable product to show for it.  This caused Beckman to become more involved with company operations, which in turn led several of Shockley’s disgruntled employees to feel they could effect real change.  They nominated Robert Noyce as their spokesman, both because he maintained a cordial relationship with Shockley and because he was possessed of an impressive charisma that made him both a natural team leader and an easy person to talk to.  With Beckman’s blessing, Noyce, Moore, Kleiner, Last, Hoerni, Roberts, Blank, and Grinich confronted Shockley and attempted to force him out of day-to-day operations at the company.  The octet wanted Noyce to serve as their new manager, but Shockley refused, arguing that Noyce did not have what it took to be an aggressive and decisive leader, criticisms that later events would show were completely justified.  Beckman therefore appointed an interim management committee and began an external search for an experienced manager.  Less than a month later, he reversed course and declared Shockley to be in charge, most likely influenced by colleagues at either Bell Labs or Stanford who pointed out that undermining Shockley would unduly tarnish the reputation of the Nobel laureate.  As a compromise, Noyce was placed in charge of R&D and a manager from another division of Beckman named Maurice Hanafin was installed as a buffer between Shockley and the rest of the staff.

Noyce was satisfied with this turn of events, but his seven compatriots were not, especially when it became clear that Shockley remained in complete control despite the appointment of Hanafin.  Led by Last, Hoerni, and Roberts, the seven scientists decided to leave the company.  Feeling they were more valuable as a group, however, they resolved to continue working together rather than going their separate ways, meaning they would need to convince an established company to hire them together and form a semiconductor research group around them.  To facilitate this process, Kleiner decided to write to a New York investment firm where his father had an account called Hayden, Stone, and Company, which had recently arranged financing for the first publicly held transistor firm, General Transistor.  Kleiner’s letter was addressed to the man in charge of his father’s account and asked for $750,000 in funding to start a new semiconductor group.  As it turned out, the account man was no longer there, so the letter ended up on the desk of a recent hire and Harvard MBA named Arthur Rock.  Rock liked what he saw and met with the seven along with his boss, Arthur “Bud” Coyle.  The two bankers strongly believed in the potential of the scientists and urged them to reach beyond their original plan and ask for a million dollars or more to fund an entire division.  In order to entice a company to form a semiconductor division, however, the seven scientists would need a leader, and none of them felt up to the task.  They realized they would have to recruit their former ringleader in their fight against Shockley, Bob Noyce.  It took some convincing, but Noyce ultimately came on board.  The seven were now eight.

Finding a company to shelter the eight co-conspirators proved harder than Rock and Coyle initially hoped.  The duo drew up a list of thirty companies they believed could handle the investment they were looking for, but were turned down by all of them.  Simply put, no one was interested in giving a group of scientists between the ages of 28 and 32 that had never developed a salable product yet felt they could run a division better than a Nobel Prize winner $1 million to pursue new advances in a volatile field of technology.  Running out of options, Coyle mentioned the plan to an acquaintance possessed of both a large fortune and a reputation for risk-taking:  Sherman Fairchild.  Sherman was the son of George Fairchild, a businessman and six-term Congressman who played a crucial role in the formation of the International Time Recording Company — one of the companies that merged to form C-T-R — and was the chairman and largest shareholder of C-T-R/IBM from its inception until his death in 1924.  A prolific inventor, Sherman developed a camera suitable for aerial photography for the United States Army during World War I and then established the Fairchild Aerial Camera Corporation in 1920.  Subsequently, Fairchild established several more companies based around his own inventions in fields ranging from aerial surveying to aircraft design.  In 1927, he consolidated seven of these organizations under the holding company Fairchild Aviation, which he renamed Fairchild Camera and Instrument (FCI) in 1944 after spinning back out his aviation business.  By 1957, Fairchild was no longer involved in the day-to-day running of any of his companies, but he was intrigued by the opportunity represented by Noyce and his compatriots and encouraged FCI to take a closer look.

Based in Syosset, New York, Fairchild Camera and Instrument had recently been placed under the care of John Carter, a former vice president of Corning Glass who felt that FCI had become too reliant on defense work for its profits, which had become scarcer and scarcer since the end of the Korean War.  Carter believed acquisitions would be the best way to secure a new course for FCI, so he proved extremely amenable to Noyce and company’s request for funding.  After a period of negotiation, Fairchild Semiconductor Corporation was formally established on September 19, 1957.  Officially, FCI loaned Fairchild Semiconductor $1.3 million in startup funding and in return was granted control of the company through a voting trust.  Ownership of Fairchild Semiconductor remained with the eight founding members and Hayden, Stone, but FCI had the right to purchase all outstanding shares of the company on favorable terms any time before it achieved three successive years of earnings of $300,000 or more.  When the scientists finally broke the news of their imminent departure to Shockley, the Nobel laureate was devastated, and though he never actually dubbed them the “Traitorous Eight,” a phrase invented by a reporter some years later, the phrase came to be associated with his feelings on the matter.  Shockley continued to pursue his dream of a four-layer diode until Beckman finally sold Shockley Semiconductor, which had never turned a profit, in 1960.  Shockley himself ultimately left the industry to teach at Stanford.

The Process

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A transistor built using the “planar process,” which revolutionized the nascent semiconductor industry

 In October 1957, Fairchild Semiconductor moved into its new facilities on Charleston Road near the southern border of Palo Alto, not far from the building that housed Shockley Semiconductor.  The Fairchild executive responsible for negotiating the final deal between FCI and the Traitorous Eight, Richard Hodgson, took on the role of chairman of the semiconductor company to look after FCI’s interests and began a search for a general manager.  Hodgson’s first choice was the charismatic Noyce, but the physicist hated confrontation and felt unready to run a whole company besides and contented himself with leading R&D.  Hodgson therefore brought in an old friend, a former physics professor that had worked as a sales manager for FCI in the 1950s named Tom Bay, to head up sales and marketing and a former paratrooper who managed the diode operation at Hughes Aircraft named Ed Baldwin as general manager.

Fairchild Semiconductor came into being at just the right time.  On October 4, 1957, the Soviet Union launched Sputnik into orbit, inaugurating a space race with the United States that greatly increased the Federal Government’s demand for transistors for use in rockets and satellites, technologies particularly unsuited to vacuum tubes due to the need for small, durable components.  At the same time, the rise of affordable silicon transistors had government agencies reevaluating the use of vacuum tubes across all their projects, particularly in computers.  This led directly to Fairchild’s first major contract.

In early 1958, Tom Bay learned that the IBM Federal Systems Division was having difficulty sourcing the parts it needed to create a navigational computer for the United States Air Force’s experimental B-70 long-range bomber.  The Air Force required particularly fast and durable silicon transistors for the project and TI, still the only major force in silicon, had been unable to provide a working model up to their specifications.  Through inheritance from his father, Sherman Fairchild was the largest shareholder at IBM and wielded some influence at the company, so Bay and Hodgson convinced him to secure a meeting with the project engineers.  IBM remained skeptical even after Noyce stated Fairchild’s engineers were up to the task, but Sherman Fairchild leaned hard on Tom Watson Jr., basically saying that if he trusted the engineers enough to invest over $1 million in their work, then Watson should trust them too.  With Sherman’s help, Fairchild Semiconductor secured a contract for 100 silicon transistors in February 1958.

Noyce knew that the project would require a type of transistor known as a mesa transistor that had been developed by Bell Labs and briefly worked on at Shockley Semiconductor, but had yet to be mass produced by any company.  Unlike previous transistors, the mesa transistor could be diffused on only one side of the wafer by taking advantage of new techniques in doping and etching.  Basically, dopants were diffused beneath a layer of silicon, after which a drop of wax was placed over the wafer.  The entire surface would then be doused in a strong acid that etched away the entire top layer except at the point protected by the wax.  This created a distinctive bump that resembled the mesas of the American Southwest, hence its name.  Fairchild decided to develop the first commercial double-diffused silicon mesa transistor, but were unsure whether an n-p-n or p-n-p configuration would perform better.  They therefore split into two teams led by Moore and Hoerni to develop both, ultimately settling on the n-p-n configuration.  Putting the transistor into production was a complete team effort.  Roberts took charge of growing the silicon crystals, Moore and Hoerni oversaw the diffusion process, Noyce and Last handled the photolithographic process to define the individual transistors on the wafer, Grinich took charge of testing, and Blank and Kleiner designed the manufacturing facility.  By May, the team had completed the design of the transistor, which they delivered to IBM in the early summer.  In August, the team presented their transistor at Wescon, an important trade show established six years before by the West Coast Electronics Manufacturers Association, and learned that their double-diffusion transistor was the only one on the market.  They maintained a monopoly on the device for about a year.

Orders soon began pouring in for double-diffused mesa transistors, most notably from defense contractor Autonetics, which wanted to use them in the Minuteman guided missile program, then the largest and most important defense project under development.  Late in 1958, however, Fairchild realized there was a serious problem with the transistor: it was exceedingly fragile.  So fragile, in fact, that even a tap from a pencil could cause one to stop working.  After testing, the team determined that when the transistor was sealed, a piece of metal would often flake off the outer can and bounce around inside, ultimately causing a short.  Fairchild would need to solve this problem quickly or risk losing its lucrative defense contracts.

During the transistor creation process, an oxide layer naturally builds up on the surface of the silicon wafer.  While this oxide layer does not interfere with the operation of the transistor, it would nevertheless be removed to prevent impurities from becoming trapped under its surface.  As early as 1957, Jean Hoerni speculated that the impurity problem was entirely imaginary and that the oxide layer could, in fact, provide a service by protecting the otherwise exposed junctions of the transistor and thus prevent just the kind of short Fairchild was now grappling with.  Hoerni did not pursue the concept at the time because Faircihld was so focused on bringing its first products to market, but in January 1959, he attacked the problem in earnest and within weeks had figured out a way to introduce an oxide mask at proper points during the diffusion process while still leaving spaces for the necessary impurities to be introduced.  On March 12, 1959, Hoerni proudly demonstrated a working transistor protected by an oxide layer, spitting on it to demonstrate it would continue working even when subjected to abuse.  Unlike the mesa transistor, a transistor created using Hoerni’s new technique resembled a bullseye with an outer layer shaped like a teardrop and was flat and smooth.  He therefore named his new technique the “planar process.”

The planar process instantly rendered all previous methods of creating transistors obsolete.  Consequently, Fairchild would not only be able to corner the market in the short term by bringing the first planar transistor to market, but it would also be able to generate income in the long term by licensing the planar process to all the other companies in the transistor business.  Complete dominance of the semiconductor industry appeared to be within Fairchild’s grasp, but then in mid-March 1959, TI announced a new product that would change the entire course of the electronics industry and, indeed, the modern world.

The Texas Edison

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Jack Kilby, the inventor of the first integrated circuit

As Fairchild was just starting its transistor business in 1958, Texas Instruments continued to extend its dominance as company revenues reached $90 million and profits soared, but the company was not content to rest on its laurels.  With the space race beginning, the military, to which TI still devoted a large portion of its electronic components business, required ever more sophisticated rockets and computers that would require millions of components to function properly.  Clearly, as long as an electronic circuit continued to require discrete transistors, resistors, capacitors, diodes, etc. all connected by wires, it would be impossible to build the next generation of electronic devices.  The solution to this problem was first proposed by a British scientist named Geoffrey Dunmer in 1952, who spoke of a solid block of material without any connecting wires that would integrate all the functionality of the discrete components of a circuit.  Dunmer was never able to complete a working block circuit based on his theories, but other organizations were soon following in his footsteps, including a physical chemist at Texas Instruments named Willas Adock.  Working under an Army contract, Adcock assembled a small task force to build a simpler circuit, which included an electrical engineer named Jack Kilby.

Born in Jefferson City, Missouri, Jack St. Clair Kilby grew up in Great Bend, Kansas, where his father worked as an electrical engineer and ultimately rose to the presidency of the Kansas Power Company.  Kilby became hooked on electrical engineering during summers spent travelling across western Kansas with his father in the 1930s as the elder Kilby visited power plants and substations inspecting and fixing equipment.  A good student, Kilby planned to continue his education at MIT, but his high school did not offer all the required math courses.  Kilby was forced to travel to Cambridge to take a special entrance exam, but did not pass.  He attended the University of Illinois instead, but his education was interrupted by service during World War II.  Kilby finally graduated in 1947 with an unremarkable academic record and took a job at a Milwaukee firm called Centralab, the only company that offered him a job.

Centralab was not a particularly important company in the electronics industry, but it did experiment with an early form of integrated circuit in which company engineers attempted to place resistors, vacuum tubes, and wiring on a single ceramic base, exposing Kilby to the concept for the first time.  In May 1958, Kilby joined Adcock’s team at TI.  Adcock was attempting to create something called a “micromodule,” in which all the components of a circuit are manufactured in one size with the wiring built into each part so they could simply be snapped together, thus obviating the need for individual wiring connections.  While a circuit built in this manner would still be composed of discrete components, it would theoretically be much smaller, more durable, and easier to manufacture.  Having already tried something similar at Centralab, however, Kilby was convinced this approach would not work.

In the 1950s, Texas Instruments followed a mass vacation policy in which all employees took time off during the same few weeks in the summer.  Too new to have accrued any vacation time, Kilby therefore found himself alone in the lab in July 1958 and decided to tinker with alternate solutions to the micromodule.  Examining the problem through a wide lens, Kilby reasoned that TI was strongest in silicon and should therefore focus on working with that element.  At the time, capacitors were created using metal and ceramics and resistors were made of carbon, but there was nothing stopping a company from creating both of those components in silicon.  While the performance of these parts would suffer significantly over their traditional counterparts, by crafting everything out of silicon, it would be possible to place the circuit on a single block of material and eliminate wires entirely.  Kilby jotted down some preliminary plans in a notebook on July 24, 1958, and then received approval from Adcock to explore the concept further when everyone returned from vacation.

On September 12, 1958, Kilby successfully demonstrated a working integrated circuit to a group of executives at TI.  While Kilby’s intent had been to craft the device out of silicon, TI did not have any blocks of the element suitable for Kilby’s project on hand, so he was forced to craft his first circuit out of germanium.  Furthermore, Kilby had not yet figured out how to eliminate wiring completely, so his original hand-crafted design could not be reliably mass produced.  Therefore, while TI brought the first integrated circuit into the world, it would be Fairchild Semiconductor that actually made them practical.

In January 1959, as Hoerni was perfecting his planar process, Robert Noyce took inspiration from his colleague’s work and began theorizing how P-N junctions and oxide layers could be used to isolate and protect all the components of a circuit on a single piece of silicon, but just as Hoerni initially sat on his planar process while Fairchild focused on delivering finished products, so too did Noyce decide not to pursue his integrated circuit concept any further.  After Kilby debuted his circuit in March, however, Noyce returned to his initial notes.  While the TI announcement may have partially inspired his work, Fairchild’s patent attorney had previously asked every member of the Fairchild team to brainstorm as many applications for the new planar process as possible for the patent filing, which appears to have been Noyce’s primary motivator.  Regardless of the impetus, Noyce polished up his integrated circuit theories and tasked Jay Last with turning them into a working product.

By May 1960, Fairchild had succeeded in creating a practical and producible integrated circuit in which all of the components were etched on a single sliver of silicon with aluminum traces resting atop a protective oxide layer replacing the wiring.  Both the Minuteman missile and the Apollo moon landing projects quickly embraced the new device as the entire transistor industry became obsolete overnight.  While discrete transistors would power several important computer projects in the 1960s — and even the first home video game system in the early 1970s — the integrated circuit ultimately ushered in a new era of small yet powerful electronic devices that could sit on a small desk or, eventually, be held in the palm of one’s hand yet perform calculations that had once required equipment filling an entire room.  In short, without the integrated circuit, the video game industry as it exists today would not be possible.

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Historical Interlude: The Birth of the Computer Part 4, Real-Time Computing

By 1955, computers were well on their way to becoming fixtures at government agencies, defense contractors, academic institutions, and large corporations, but their function remained limited to a small number of activities revolving around data processing and scientific calculation.  Generally speaking, the former process involved taking a series of numbers and running them through a single operation, while the latter process involved taking a single number and running it through a series of operations.  In both cases, computing was done through batch processing — i.e. the user would enter a large data set from punched cards or magnetic tape and then leave the computer to process that information based on a pre-defined program housed in memory.  For companies like IBM and Remington Rand, which had both produced electromechanical tabulating equipment for decades, this was a logical extension of their preexisting business, and there was little impetus for them to discover novel applications for computers.

In some circles, however, there was a belief that computers could move beyond data processing and actually be used to control complex systems.  This would require a completely different paradigm in computer design, however, based around a user interacting with the computer in real-time — i.e. being able to give the computer a command and have it provide feedback nearly instantaneously.  The quest for real-time computing not only expanded the capabilities of the computer, but also led to important technological breakthroughs instrumental in lowering the cost of computing and opening computer access to a greater swath of the population.  Therefore, the development of real-time computers served as the crucial final step in transforming the computer into a device capable of delivering credible interactive entertainment.

Note: This is the fourth and final post in a series of “historical interludes” summarizing the evolution of computer technology between 1830 and 1960.   The information in this post is largely drawn from Computer: A History of the Information Machine by Martin Campbell-Kelly and William Aspray,  A History of Modern Computing by Paul Ceruzzi, Forbes Greatest Technology Stories: Inspiring Tales of Entrepreneurs and Inventors Who Revolutionized Modern Business by Jeffrey Young, IBM’s Early Computers by Charles Bashe, Lyle Johnson, John Palmer, and Emerson Pugh, and The Ultimate Entrepreneur: The Story of Ken Olsen and Digital Equipment Corporation by Glenn Rifkin and George Harrar.

Project Whirlwind

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Jay Forrester (l), the leader of Project Whirlwind

The path to the first real-time computer began with a project that was never supposed to incorporate digital computing in the first place.  In 1943, the head of training at the United States Bureau of Aeronautics, a pilot and MIT graduate named Captain Luis de Florez, decided to explore the feasibility of creating a universal flight simulator for military training.  While flight simulators had been in widespread use since Edwin Link had introduced a system based around pneumatic bellows and valves called the Link Trainer in 1929 and subsequently secured an Army contract in 1934, these trainers could only simulate the act of flying generally and were not tailored to specific planes.  Captain de Florez envisioned using an analog computer to simulate the handling characteristics of any extant aircraft and turned to his alma mater to make this vision a reality.

At the time, MIT was already the foremost center in the United States for developing control systems thanks to the establishment of the Servomechanisms Laboratory in 1941, which worked closely with the military to develop electromechanical equipment for fire control, bomb sights, aircraft stabilizers, and similar projects.  The Bureau of Aeronautics therefore established Project Whirlwind within the Servomechanisms Laboratory in 1944 to create de Florez’s flight trainer.  Leadership of the Whirlwind project fell to an assistant director of the Servomechanisms Laboratory named Jay Forrester.  Born in Nebraska, Forrester had been building electrical systems since he was a teenager, when he constructed a 12-volt electrical system out of old car parts to provide his family’s ranch with electricity for the first time.  After graduating from the University of Nebraska, Forrester came to MIT as a graduate student in 1939 and joined the Servomechanisms Laboratory at its inception.  By 1944, Forrester was getting restless and considering establishing his own company, so he was given his choice of projects to oversee to prevent his defection.  Forrester chose Whirlwind.

In early 1945, Forrester drew up the specifications for a trainer consisting of a mock cockpit connected to an analog computer that would control a hydraulic transmission system to provide feedback to the cockpit.  Based on this preliminary work, MIT drafted a proposal in May 1945 for an eighteen-month project budgeted at $875,000, which was approved.  As work on Whirlwind began, the mechanical elements of the design came together quickly, but the computing element remained out of reach.  To create an accurate simulator, Forrester required a computer that updated dozens of variables constantly and reacted to user input instantaneously.  Bush’s Differential Analyzer, perhaps the most powerful analog computer of the time, was still far too slow to handle these tasks, and Forrester’s team could not figure out how to produce a more powerful machine solely through analog components.  In the summer of 1945, however, a fellow MIT graduate student named Perry Crawford that had written a master’s thesis in 1942 on using a digital device as a control system alerted Forrester to the breakthroughs being made in digital computing at the Moore School.  In October, Forrester and Crawford attended a Conference on Advanced Computational Techniques hosted by MIT and learned about the ENIAC and EDVAC in detail.  By early 1946, Forrester was convinced that the only way forward for Project Whirlwind was the construction of a digital computer that could operate in real time.

The shift from an analog computer to a digital computer for the Whirlwind project resulted in a threefold increase in cost to an estimated $1.9 million. It also created an incredible technical challenge.  In a period when the most advanced computers under development were struggling to achieve 10,000 operations a second, Whirlwind would require the capability of performing closer to 100,000 operations per second for seamless real-time operation.  Furthermore, the first stored-program computers were still three years away, so Forrester’s team also faced the prospect of integrating cutting edge memory technologies that were still under development.  By 1946, the size of the Whirlwind team had grown to over a hundred staff members spread across ten groups each focused on a particular part of the system in an attempt to meet these challenges.  All other aspects of the flight simulator were placed on hold as the entire team focused its attention on creating a working real-time computer.

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The Whirlwind I, the first real-time computer

By 1949, Forrester’s team had succeeded in designing an architecture fast enough to support real-time operation, but the computer could not operate reliably for extended periods.  With costs escalating and no end to development in sight, continued funding for the project was placed in jeopardy.  After the war, responsibility for Project Whirlwind had transferred from the Bureau of Aeronautics to the Office of Naval Research (ONR), which felt the project was not providing much value relative to a cost that had by now far surpassed $1.9 million.  By 1948, Whirlwind was consuming twenty percent of ONR’s entire research budget with little to show for it, so ONR began slowly trimming the budget.  By 1950, ONR was ready to cut funding all together, but just as the project appeared on the verge of death, it was revived to serve another function entirely.

On August 29, 1949, the Soviet Union detonated its first atomic bomb.  In the immediate aftermath of World War II, the United States had felt relatively secure from the threat of Soviet attack due to the distance between the two nations, but now the USSR had both a nuclear capability and a long range bomber capable of delivering a payload on U.S. soil.  During World War II, the U.S. had developed a primitive radar early warning system to protect against conventional attack, but it was wholly insufficient to track and interdict modern aircraft.  The United States needed a new air defense system and needed it quickly.

In December 1949, the United States Air Force formed a new Air Defense System Engineering Committee (ADSEC) chaired by MIT professor George Valley to address the inadequacies in the country’s air-defense system.  In 1950, ADSEC recommended creating a series of computerized command-and-control centers that could analyze incoming radar signals, evaluate threats, and scramble interceptors as necessary to interdict Soviet aircraft.  Such a massive and complex undertaking would require a powerful real-time computer to coordinate.  Valley contacted several computer manufacturers with his needs, but they all replied that real-time computing was impossible.

Despite being a professor at MIT, Valley knew very little about the Whirlwind project, as he was not interested in analog computing and had no idea it had morphed into a digital computer.  Fortunately, a fellow professor at the university, Jerome Wiesner, pointed him towards the project.  By early 1950, the Whirlwind I computer’s basic architecture had been completed, and it was already running its first test programs, so Forrester was able to demonstrate its real-time capabilities to Valley.  Impressed by what he saw, Valley organized a field-test of the Whirlwind as a radar control unit in September 1950 at Hanscom Field outside Bedford, Massachusettes, where a radar station connected to Whirlwind I via a phone line successfully delivered a radar signal from a passing aircraft.  Based on this positive result, the United States Air Force established Project Lincoln in conjunction with MIT in 1951 and moved Whirlwind to the new Lincoln Laboratory.

Project SAGE

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A portion of an IBM AN/FSQ-7 Combat Direction Central, the heart of the SAGE system and the largest computer ever built

By April 1951, the Whirlwind I computer was operational, but still rarely worked properly due to faulty memory technology.  At Whirlwind’s inception, there were two primary forms of electronic memory in use, the delay-line storage pioneered for the EDVAC and CRT memory like the Williams Tube developed for the Manchester Mark I.  From his exposure to the EDVAC, Forrester was already familiar with delay-line memory early in Whirlwind’s development, but that medium functioned too slowly for a real-time design.  Forrester therefore turned his attention to CRT memory, which could theoretically operate at a sufficient speed, but he rejected the Williams Tube due to its low refresh rate.  Instead, Forrester incorporated an experimental tube memory under development at MIT, but this temperamental technology never achieved its promised capabilities and proved unreliable besides.  Clearly, a new storage method would be required for Whirlwind.

In 1949, Forrester saw an advertisement for a new ceramic material called Deltamax from the Arnold Engineering Company that could be magnetized or demagnetized by passing a large enough electric current through it.  Forrester believed the properties of this material could be used to create a fast and reliable form of computer memory, but he soon discovered that Deltamax could not switch states quickly at high temperatures, so he assigned a graduate student named William Papian to find an alternative.  In August 1950, Papian completed a master’s thesis entitled “A Coincident-Current Magnetic Memory Unit” laying out a system in which individual cores — small doughnut-shaped objects — with magnetic properties similar to Deltamax are threaded into a three-dimensional matrix of wires.  Two wires are passed through the center of the core to magnetize or demagnetize it by taking advantage of a property called hysteresis in which an electrical current only changes the magnetization of the material if it is above a certain threshold.  Only when currents are run through both wires and passed in the same direction will the magnetization change, making the cores a suitable form of computer memory.  A third wire is threaded through all of the cores in the matrix, allowing any portion of the memory to be read at any time.

Papian built the first small core memory matrix in October 1950, and by the end of 1951 he was able to construct a 16 x 16 array of cores.  During this period, Papian tested a wide variety of materials for his cores and settled on a silicon-steel ribbon wrapped around a ceramic bobbin, but these cores still operated too slowly and also required an unacceptably high level of current.  At this point Forrester discovered a German ceramicist in New Jersey named E. Albers-Schoenberg was attempting to create a transformer for televisions by mixing iron ore with certain oxides to create a compound called a ferrite that exhibited certain magnetic properties.  While ferrites generated a weaker output than the metallic cores Papian was experimenting with, they could switch up to ten times faster.  After experimenting with various chemical compositions, Papian finally constructed a ferrite-based core memory system in May 1952 that could switch between states in less than a microsecond and therefore serve the needs of a real-time computer.  First installed in the Whirlwind I in August 1953, ferrite core memory was smaller, cheaper, faster, and more reliable than delay-line, CRT, and magnetic drum memory and ultimately doubled the operating speed of the computer while reducing maintenance time from four hours a day to two hours a week.  Within five years, core memory had replaced all other forms of memory in mainframe computers, netting MIT a hefty profit in patent royalties.

With Whirlwind I finally fully functional the Lincoln Laboratory turned its attention to transforming the computer into a commercial command-and-control system suitable for installation in the United States Air Force’s air defense system.  This undertaking was beyond the scope of the lab itself, as it would require fabrication of multiple components on a large scale.  Lincoln Labs evaluated three companies to take on this task, defense contractor Raytheon, which had recently established a computer division, Remington Rand — through both its EMCC and ERA subsidiaries — and IBM.  At the time, Remington Rand was still the powerhouse in the new commercial computer business, while IBM was only just preparing to bring its first products to market.  Nonetheless, Forrester and his team were impressed with IBM’s manufacturing facilities, service force, integration, and experience deploying electronic products in the field and therefore chose the new kid on the block over its more established competitor.  Originally designated Project High by IBM — due to its location on the third floor of a necktie factory on High Street in Poughkeepsie — and the Whirlwind II by Lincoln Laboratory, the project eventually went by the name Semi-Automatic Ground Environment, or SAGE.

The heart of the SAGE system was a new IBM computer derived from the Whirlwind design called the AN/FSQ-7 Combat Direction Central.  By far the largest computer system ever built, the AN/FSQ-7 weighed 250 tons, consumed three megawatts of electricity, and took up roughly half an acre of floor space.  Containing 49,000 vacuum tubes and a core memory capable of storing over 65,000 33-bit words, the computer was capable of performing roughly 75,000 operations per second.  In order to insure uninterrupted operation, each SAGE installation actually consisted of two AN/FSQ-7 computers so that if one failed, the other could seamlessly assume control of the air defense center.  As the first deployed real-time computer system, it inaugurated a number of firsts in commercial computing such as the ability generate text and vector graphics on a display screen, the ability to directly enter commands via a typewriter-style keyboard, and the ability to select or draw items directly on the display using a light pen, a technology developed specifically for Whirlwind in 1955.  In order to remain in constant contact with other segments of the air defense system, the computer was also the first outfitted with a new technology called a modem developed by AT&T’s Bell Labs research division to allow data to be transmitted over a phone line.

The first SAGE system was deployed at McChord Air Force Base in November 1958, and the entire network of twenty-three Air Defense Direction Centers were online by 1963 at a total cost to the government of $8 billion.  While IBM agreed to do the entire project at cost as part of its traditional support for national defense, the project still brought the company $500 million in revenues in the late 1950s.  SAGE was perhaps the key project in IBM’s rise to dominance in the computer industry.  Through this massive undertaking, IBM became the most knowledgeable company in world at designing, fabricating, and deploying both large-scale mainframe systems and their critical components such as core memory and computer software.  In 1954, IBM upgraded its 701 computer to replace Williams Tubes memory with magnetic cores and released the system as the IBM 704.  The next year, a core-memory replacement for the 702 followed designated the IBM 705.  These new computers were instrumental in vaulting IBM past Remington Rand in the late 1950s.  SAGE, meanwhile, remained operational until 1983.

The Transistor and the TX-0

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Kenneth Olsen, co-designer of the TX-0 and co-founder of the Digital Equipment Corporation (DEC)

While building a real-time computer for the SAGE air-defense system was the primary purpose of Project Whirlwind, the scope of the project grew large enough by the middle of the 1950s that staff could occasionally indulge in other activities, such as a new computer design proposed by staff member Kenneth Olsen.  Born in Bridgeport, Connecticut, Olsen began experimenting with radios as a teenager and took an eleven-month electronics course after entering the Navy during World War II.  The war was over by the time his training was complete, so after a single deployment on an admiral’s staff in the Far East, Olsen left the Navy to attend MIT in 1947, where he majored in electrical engineering.  After graduating in 1950, Olsen decided to continue his studies at MIT as a graduate student and joined Project Whirlwind.  One of Olsen’s duties on the project was the design and construction of the Memory Test Computer (MTC), a smaller version of the Whirlwind I built to test various core memory solutions.  In creating the MTC, Olsen innovated with a modular design in which each group of circuits responsible for a particular function was placed on a single plug-in unit placed on a rack that could be easily swapped out if it malfunctioned.  This was a precursor of the plug-in circuit boards still used today on computers.

One of the engineers who helped Olsen debug the MTC was Wes Clark, a physicist that came to Lincoln Laboratory in 1952 after working at the Hanford nuclear production site in Washington State.  Clark and Olsen soon bonded over their shared views on the future of computing and their desire to create a computer that would apply the lessons learned during the Whirlwind project and the construction of the MTC to the latest advances in electronics to demonstrate the potential of a fast and power-efficient computer to the defense industry.  Specifically, Olsen and Clark wanted to explore the potential of a relatively new electronic component called the transistor.

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John Bardeen (l), William Shockley (seated), and Walter Brattain, the team that invented the transistor

For over forty years, the backbone of all electronic equipment was the vacuum tube pioneered by John Fleming in 1904.  While this device allowed for switching at electronic speeds, however, its limitations were numerous.  Vacuum tubes generated a great deal of heat during operation, which meant that they consumed power at a prodigious rate and were prone to burnout over extended periods of use.  Furthermore, they could not be miniaturized beyond a certain point and had to be spaced relatively far apart for heat management, guaranteeing that tube-based electronics would always be large and bulky.  Unless an alternative switching device could be found, the computer would never be able to shrink below a certain size.  The solution to the vacuum tube problem came not from one of the dozen or so computer projects being funded by the U.S. government, but from the telephone industry.

In the 1920s and 1930s, AT&T, which held a monopoly on telephone service in the United States, began constructing a series of large switching facilities in nearly every town in the country to allow telephone calls to be placed between any two phones in the United States.  These facilities relied on the same electromechanical relays that powered several of the early computers, which were bulky, slow, and wore out over time.  Vacuum tubes were sometimes used as well, but the problems articulated above made them particularly unsuited for the telephone network.  As AT&T continued to expand its network, the size and speed limitations of relays became increasingly unacceptable, so the company gave a mandate to its Bell Labs research arm, one of the finest corporate R&D organizations in the world, to discover a smaller, faster, and more reliable switching device.

In 1936, the new director of research at Bell Labs, Mervin Kelly, decided to form a group to explore the possibility of creating a solid-state switching device.  Both solid-state physics, which explores the properties of solids based on the arrangement of their sub-atomic particles, and the related field of quantum mechanics, in which physical phenomena are studied on a nanoscopic scale, were in their infancy and not widely understood, so Kelly scoured the universities for the smartest chemists, metallurgists, physicists, and mathematicians he could find.  His first hire was a brilliant, but difficult physicist named William Shockley.  Born in London to a mining engineer and a geologist, William Bradford Shockley, Jr. grew up in Palo Alto, California, in the heart of the Santa Clara Valley, a region known as the “Valley of the Heart’s Delight” for its orchards and flowering plants.  Shockley’s father spent most of his time moving from mining camp to mining camp, so he grew especially close to his mother, May, who taught him the ins and outs of geology from a young age.  After attending Stanford to stay close to his mother, Shockley received a Ph.D. from MIT in 1936 and went to work for Bell.  Gruff and self-centered, Shockley never got along with his colleagues anywhere he worked, but there was no questioning his brilliance or his ability to push colleagues towards making new discoveries.

Kelly’s group began educating itself on the field of quantum mechanics through informal sessions where they would each take a chapter of the only quantum mechanics textbook in existence and teach the material to the rest of the group.  As their knowledge of the underlying science grew in the late 1930s, the group decided the most promising path to a solid-state switching device lay with a group of materials called semiconductors.   Generally speaking, most materials are either a conductor of electricity, allowing electrons to flow through them, or an insulator, halting the flow of electrons.  As early as 1826, however, Michael Faraday, the brilliant scientist whose work paved the way for electric power generation and transmission, had observed that a small number of compounds would not only act as a conductor under certain conditions and an insulator in others, but would also serve as amplifiers under certain conditions as well.  These properties allowed a semiconductor to behave like a triode under the right conditions, but for decades scientists remained unable to determine why changes in heat, light, or magnetic field would alter the conductivity of these materials and therefore could not harness this property.  It was not until the field of quantum mechanics became more developed in the 1930s that scientists gained a great enough understanding of electron behavior to attack the problem.  Kelly’s new solid-state group hoped to unlock the mystery of semiconductors once and for all, but their work was interrupted by World War II.

In 1945, Kelly revived the solid-state project under the joint supervision of William Shockley and chemist Stanley Morgan.  The key members of this new team were John Bardeen, a physicist from Wisconsin known as one of the best quantum mechanics theorists in the world, and Walter Brattain, a farm boy from Washington known for his prowess at crafting experiments.  During World War II, great progress had been made in creating crystals of the semiconducting element germanium for use in radar, so the group focused its activities on that element.  In late 1947, Bardeen and Brattain discovered that if they introduced impurities into just the right spot on a lump of germanium, the germanium could amplify a current in the same manner as a vacuum tube triode.  Shockley’s team gave an official demonstration of this phenomenon to other Bell Labs staff on December 23, 1947, which is often recognized as the official birthday of the transistor, so named because it effects the transfer of a current across a resistor — i.e. the semiconducting material.  Smaller, less power-hungry, and more durable than the vacuum tube, the transistor paved the way for the development of the entire consumer electronics and personal computer industries of the late twentieth century.

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The TX-0, one of the earliest transistorized computers, designed by Wes Clark and Kenneth Olsen

Despite its revolutionary potential, the transistor was not incorporated into computer designs right away, as there were still several design and production issues that had to be overcome before it could be deployed in the field in large numbers (which will be covered in a later post).  By 1954, however, Bell Labs had deployed the first fully transistorized computer, the Transistor Digital Computer or TRADIC, while electronics giant Philco had introduced a new type of transistor called a surface-barrier transistor that was expensive, but much faster than previous designs and therefore the first practical transistor for use in a computer.  It was in this environment that Clark and Olsen proposed a massive transistorized computer called the TX-1 that would be roughly the same size as a SAGE system and deploy one of the largest core memory arrays ever built, but they were turned down because Forrester did not find their design practical.  Clark therefore went back to the drawing board to create as simple a design as he could that still demonstrated the merits of transistorized computing.  As this felt like a precursor to the larger TX-1, Olsen and Clark named this machine the TX-0.

Completed in 1955 and fully operational the next year, the TX-0 — often pronounced “Tixo” — incorporated 3,600 surface-barrier transistors and was capable of performing 83,000 operations per second.  Like the Whirlwind, the TX-0 operated in real time, and it also incorporated a display with a 512×512 resolution that could be manipulated by a light pen, and a core memory that could store over 65,000 words, though Clark and Olsen settled on a relatively short 18-bit word length.  Unlike the Whirlwind I, which occupied 2,500 square feet, the TX-0 took up a paltry 200 square feet.  Both Clark and Olsen realized that the small, fast, interactive TX-0 represented something new: a (relatively) inexpensive computer that a single user could interact with in real time.  In short, it exhibited many of the hallmarks of what would become the personal computer.

With the TX-0 demonstrating the merits of high-speed transistors, Clark and Olsen returned to their goal of creating a more complex computer with a larger memory, which they dubbed the TX-2.  Completed in 1958, the TX-2 could perform a whopping 160,000 operations per second and contained a core memory of 260,000 36-bit words, far surpassing the capability of the earlier TX-0.  Olsen once again designed much of the circuitry for this follow-up computer, but before it was completed he decided to leave MIT behind.

The Digital Equipment Corporation

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The PDP-1, Digital Equipment Corporation’s First Computer

Despite what Olsen saw as the nearly limitless potential of transistorized computers, the world outside MIT remained skeptical.  It was one thing to create an abstract concept in a college laboratory, people said, but another thing entirely to actually deploy an interactive transistorized system under real world conditions.  Olsen fervently desired to prove these naysayers wrong, so along with a fellow student who worked with him on the MTC named Harlan Anderson he decided to form his own computer company.  As a pair of academics with no practical real-world business experience, however, Olsen and Anderson faced difficulty securing financial backing.  They approached defense contractor General Dynamics first, but were flatly turned down.  Unsure how to proceed next, they visited the Small Business Administration office in Boston, which recommended they contact investor Georges Doriot.

Georges Doriot was a Frenchman who immigrated to the United States in the 1920s to earn an MBA from Harvard and then decided to stay on as a professor at the school.  In 1940, Doriot became an American citizen, and the next year he joined the United States Army as a lieutenant colonel and took on the role of director of the Military Planning Division for the Quartermaster General.  Promoted to brigadier general before the end of the war, Doriot returned to Harvard in 1946 and also established a private equity firm called the American Research and Development Corporation (ARD).  With a bankroll of $5 million raised largely from insurance companies and educational institutions, Doriot sought out startups in need of financial support in exchange for taking a large ownership stake in the company.  The goal was to work closely with the company founders to grow the business and then sell the stake at some point in the future for a high return on investment.  While many of the individual companies would fail, in theory the payoff from those companies that did succeed would more than make up the difference and return a profit to the individuals and groups that provided his firm the investment capital.  Before Doriot, the only outlets for a new business to raise capital were the banks, which generally required tangible assets to back a loan, or a wealthy patron like the Rockefeller or Whitney families.  After Doriot’s model proved successful, inexperienced entrepreneurs with big ideas now had a new outlet to bring their products to the world.  This outlet soon gained the name venture capital.

In 1957, Olsen and Anderson wrote a letter to Doriot detailing their plans for a new computer company.  After some back and forth and refinement of the business plan, ARD agreed to provide $70,000 to fund Olsen and Anderson’s venture in return for a 70% ownership stake, but the money came with certain conditions.  Olsen wanted to build a computer like the TX-0 for use by scientists and engineers that could benefit from a more interactive programming environment in their work, but ARD did not feel it was a good idea to go toe-to-toe with an established competitor like IBM.  Instead, ARD convinced Olsen and Anderson to produce components like power supplies and test equipment for core memory.  Olsen and Anderson had originally planned to call their new company the Digital Computer Corporation, but with their new ARD-mandated direction, they instead settled on the name Digital Equipment Corporation (DEC).

In August 1957, DEC moved into its new office space on the second floor of Building 12 of a massive woolen mill complex in Maynard, Massachusetts, originally built in 1845 and expanded many times thereafter.  At the time, the company consisted of just three people: Ken Olsen, Harlan Anderson, and Ken’s younger brother Stan, who had worked as a technician at Lincoln Lab.  Ken served as the leader and technical mastermind of the group, Anderson looked after administrative matters, and Stan focused on manufacturing.  In early 1958, the company released its first products.

DEC arrived on the scene at the perfect moment.  Core memory was in high demand and transistor prices were finally dropping, so all the major computer companies were exploring new designs, creating an insatiable demand for testing equipment.  As a result, DEC proved profitable from the outset.  In fact, Olsen and Anderson actually overpriced their stock due to their business inexperience, but with equipment in such high demand, firms bought from DEC anyway, giving the company extremely high margins and allowing it to exceed its revenue goals.  Bolstered by this success, Olsen chose to revisit the computer project with ARD, so in 1959 DEC began work on a fully transistorized interactive computer.

Designed by Ben Gurley, who had developed the display for the TX-0 at MIT, the Programmed Data Processor-1, more commonly referred to as the PDP-1, was unveiled in December 1959 at the Eastern Joint Computer Conference in Boston.  It was essentially a commercialized version of the TX-0, though it was not a direct copy.  The PDP-1 incorporated a better display than its predecessor with a resolution of 1024 x 1024 and it was also faster, capable of 100,000 operations per second.  The base setup contained only 4,096 18-bit words of core memory, but this could be upgraded to 65,536.  The primary method of inputting programs was a punched tape reader, and it was hooked up to a typewriter as well.  While not nearly as powerful as the latest computers from IBM and its competitors in the mainframe space, the PDP-1 only cost $120,000, a stunningly low price in an era where buying a computer would typically set an organization back a million dollars or more.  Lacking developed sales, manufacturing, or service organizations, DEC sold only a handful of PDP-1 computers over its first two years on the market to organizations like Bolt, Beranek, and Newman and the Lawrence Livermore Labs.  A breakthrough occurred in late 1962 when the International Telegraph and Telephone Company (ITT) decided to order fifteen PDP-1 computers to form the heart of a new telegraph message switching system designated the ADX-7300.  ITT would continue to be DEC’s most important PDP-1 customer throughout the life of the system, ultimately purchasing roughly half of the fifty-three computers sold.

While DEC only sold around fifty PDP-1’s over its lifetime, the revolutionary machine introduced interactive computing commercially and initiated the process of opening computer use to ever greater portions of the public, which culminated in the birth of the personal computer two decades later.  With its monitor and real-time operation, it also provided a perfect platform for creating engaging interactive games.  Even with these advances, the serious academics and corporate data handlers of the 1950s were unlikely to ever embrace the computer as an entertainment medium, but unlike the expensive and bulky mainframes reserved for official business, the PDP-1 and its successors soon found their way into the hands of students at college campuses around the country, beginning with the birthplace of the PDP-1 technology: MIT.