1/ Letter #20: Fairchild Semiconductor (1957)
The Beginning of Silicon Valley
*Note: This is the Fairchild Semiconductor section of the Fairchild Camera & Instrument Shareholder Letter by John Carter and Sherman Fairchild
aletteraday.substack.com/p/letter-20-fa…
The Beginning of Silicon Valley
*Note: This is the Fairchild Semiconductor section of the Fairchild Camera & Instrument Shareholder Letter by John Carter and Sherman Fairchild
aletteraday.substack.com/p/letter-20-fa…
2/ Transistors, which are made from newly developed materials called semi-conductors, can be [substituted] for many types of vacuum tubes and, at their best, are more compact, more durable and require less electrical energy.
2a/ The public is most familiar with these remarkable electronic circuitry components through portable radios or hearing aids with a greatly extended battery life.
3/ The problem that Fairchild faced, despite its keen interest in transistors, was one of how to get into the field without very large capital investment and a prospect of years of research before production might be feasible.
3a/ Competition of some types of transistors was already sharp. Qualified technical personnel was in extremely short supply.
4/ The answer came when a group of leading semi-conductor scientists came to Fairchild with a proposal that the company finance and administer them as the [nucleus] of a specialized semi-conductor business.
5/ Fairchild believed their proposal represented the least costly and the least risky way to prepare the company for developing a competitive semi-conductors business.
6/ The broad assignment given to this new company was to design transistors either of the most needed types or to perform better or uniquely in applications for which few if any present transistors are suitable.
7/ the new transistor affiliate was set up in part to meet the company’s own needs
Transistors are playing an increasingly important part in computers of all types an in the kind of control systems utilized for reconnaissance. They are needed for missile and satellite equipment
Transistors are playing an increasingly important part in computers of all types an in the kind of control systems utilized for reconnaissance. They are needed for missile and satellite equipment
8/ it should not be assumed that any new group in such a technically difficult field can develop into [a] profitable operation quickly. A year or more is the span suggested by the experience of your company...
8a/ … and others with the natural cycle of organization, research, development, production prototype and pre-production runs.
9/ Fairchild will endeavor to keep startup costs to a sensible minimum and to assist the promising new affiliate in any possible way. The effort is fully justified both by the present market for transistors and their potential.
End/ If you want full context and some light notes for each quote, or just to keep up with what I’m reading, check out my substack
aletteraday.substack.com
aletteraday.substack.com
PS/ If you’re interested in Fairchild, definitely check out this @neckarcap tweetstorm on it’s inception:
PS2/ Check out my previous tweetstorm on Teledyne — a similar company cofounded/financed by the same man — Arthur Rock
PS3/ Check out my previous letter on Arthur Rock’s essay on Strategy vs Tactics
